What is happening to house prices in Melbourne?

By Janet Spencer

 What is happening to house prices in Melbourne?

This week we’ve had conflicting reports on what is happening to house prices in Melbourne. On Monday RP Data- Rismark published research that pointed to house prices dropping by 2.1% in Melbourne during the month of May.  RP-Rismark noted that this reduction occurred despite the RBA cutting the official cash rate to an historic low of 2.75%.

However, Australian Property Monitors are saying that house prices are in fact rising. Auction clearance rates remaining consistently above 70% have been helping and Melbourne’s median house price increased by 3.6% to $538,922 over the March quarter. 

The REIV June Research Bulletin gives us an overview of the House Price Index ( REIV HPI) and they say housing went up 1.4% in May 2013 to the highest level since November 2011 and further that this marks 8 back to back months of positive growth.  This is the highest level since November 2011.  Units were said to have gone up 0.9% in May.

So who is correct?  RP-Rismark, APM or the REIV?

The differences may be explained by how they measure price data.   RP Data-Rismark measure analyses prices from both private sales and Auction sales while APM monitor Auction sales.  APM measure prices over a 3 month period while RP Data monitors and reports on prices monthly.

While private sales are the dominant method of sale in many parts of Australia,  in Melbourne – particularly across the inner suburbs of the city – Auctions are clearly the more popular method of sale.  So, with strong clearance rates you would expect to see higher prices. This mirrors what we’re seeing in the market with many of the properties that we are buying selling for well above the quote range. Last week a property in Glen Iris sold prior to Auction for a price that was 25% higher than the quoted price range!!!

If you’re uncertain as to where prices are going in the suburb  you are looking to buy and home or invest Buyer Solutions can help.

For up to date information on what’s happening in real estate in Melbourne, contact Janet at  jspencer@buyersolutions.com.au or 0418 101 146.

By Janet Spencer

Buying property, First home buyers, Housing Affordability, Housing Market, Investment, Investment property, Real Estate News & Opinion, State of the market

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