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News: Luxury home prices drop [in Melbourne]

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Luxury home prices drop

Hamish Heard From: Sunday Herald Sun October 17, 2010 12:01AM

THE bubble at the top end of Melbourne's property market has burst.

The latest Real Estate Institute of Victoria figures show median house prices fell in many of the city's wealthiest suburbs in the September quarter.

Prices slumped by more than 10 per cent in 14 of Melbourne's 40 million-dollar suburbs, with South Yarra, Brighton, Albert Park and Kew among the hardest hit.

Hawthorn fared the worst, with the median dropping 26.9 per cent to $1,197,500 in the three months to October 1.

Overall, million-dollar suburbs decreased in value by 1.6 per cent during the period.

The figures show Toorak's median price rose slightly in the quarter, but was down 16.8 per cent on the corresponding period last year.

Many of the suburb's top addresses, including the $6 million Irving Rd mansion belonging to Rose Porteous, have failed to find buyers despite being on the market for more than a year.

More: http://www.heraldsun.com.au/business/luxury-home-prices-drop/story-e6frfh4f-1225939674311

The REIV has a different take:

Record median house price following quarter of moderate growth

15-Oct-2010

The REIV has released the September quarter median prices, which reveal that the median price of a house in Melbourne has increased by 0.9 per cent to $565,000 from a revised $560,000 in the June quarter.

REIV CEO Enzo Raimondo said that after 18 months of unprecedented growth that saw the median price increase by $160,000 from $405,000 in the March quarter 2009, price growth had levelled off.

“House prices have never been this high and it is clear that affordability will continue to be a significant issue, particularly for first home buyers.

“As Melbourne enters another spring selling season, it is clear the market is well balanced; more homes have been sold than any year since 2007 and buyers are benefiting from a very healthy level of supply.

“The more moderate market will make it easier for buyers this spring, particularly in the auction market, where a higher number of listings have resulted in a slight reduction in prices compared to the June quarter.

“Essendon was the standout suburb this quarter; its median house price increased by 14.4 per cent to $1.15M and it had a 79.1 per cent clearance rate for auctions. It also recorded a 13 per cent increase in the median price of a unit or apartment.

http://www.reiv.com.au/news/details.asp?NewsID=1005

Also:

REIV releases September quarter median prices.

The REIV has released the September quarter median prices, which reveal that the median price of a house in Melbourne has increased by 0.9 per cent to $565,000 from a revised $560,000 in the June quarter.

REIV CEO Enzo Raimondo said that after 18 months of unprecedented growth that saw the median price increase by $160,000 from $405,000 in the March quarter 2009, price growth had levelled off.

“House prices have never been this high and it is clear that affordability will continue to be a significant issue, particularly for first home buyers.

“As Melbourne enters another spring selling season, it is clear the market is well balanced; more homes have been sold than any year since 2007 and buyers are benefiting from a very healthy level of supply.

“The more moderate market will make it easier for buyers this spring, particularly in the auction market, where a higher number of listings have resulted in a slight reduction in prices compared to the June quarter.

http://www.reiv.com.au/home/inside.asp?ID=1048&nav1=1226&nav2=165&nav3=1048

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REIV CEO Enzo Raimondo said that after 18 months of unprecedented growth that saw the median price increase by $160,000 from $405,000 in the March quarter 2009, price growth had levelled off.

Why pick March 2009? Why not Dec 2007?

Melbourne Median hits $485,000

3-Feb-2008

The release of the REIV’s December quarter median prices showed the single largest quarterly increase in the median price of a Melbourne house in the history of the series. The increase in the median price of 12.8 per cent to $485,000 was remarkable, but not surprising as 2007 was consistently a strong year for the residential property market.

http://www.reiv.com.au/news/details.asp?NewsID=617

Tips for aspiring spruikers:

Always compare to the lowest historical point to exaggerate gains

Exhibit consistent bias towards (silently) revising down past prices to overstate gains and understate price falls

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And for a little more perspective:

Residential property market rebounds in December quarter

29-Jan-2005

The December quarter Melbourne median house price rebounded 5.2 per cent to $382,500, up from a revised figure of $363,000 in the September quarter. This represents a fall in the median price of 1.3 per cent over the past 12 months.

Source: REIV Press Release Archive (Deleted from reiv.com.au)

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mmmm... looks like $459,000. A rare upward revision.

a greater than 10% revision. reiv, dismissed!

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