REIV has released the median prices for December 2008 and they don’t look too bad considering our current economic conditions. Contrary to the expectations of a serious drop in the median prices, they only fell by 0.9% in the December quarter of 2008. This came as a surprise to people who don’t follow the property market closely and I felt that a little bit of explanation is in order.
The slowdown in economy which hit the US in 2008 and which we are starting to feel in Australia now was expected to drive the housing prices down and many feared a free fall of the whole real estate market here. To prevent that from happening, RBA has made some serious interest rates’ cuts and the government offered incentives to the first home buyers (increased FHOG) to convince them that buying a house now is a great idea.
It worked and first home buyers began to buy. This explains why there is a major reduction in prices on what’s called “higher end of the market” (expensive suburbs like Brighton, Balwyn and Kew) while the lower end suburbs where properties are priced under 500K (Craigieburn, Ferntree Gully, Thomaston to name a few) show some price growth. But even with all that “artificially created” activity REIV says that the number of sales has dropped by 25%. That means that 25% more people either can’t afford to buy or think that buying now is not a good idea.
This situation makes me wonder - although we don’t know when the interest rates will start climbing up, the boosted FHOG is expiring in June of 2009, in 4 months from now. What’s that going to do for the real estate market? Will first home buyers still be keen to buy? Will the government extend the offer of increased FHOG for another 6 months?
Finally the last bits of useful information: Melbourne median house price for December 2008 is $426,000, median unit price is $365,000 and you can watch the REIV presenting and explaining all the statistics by clicking on the video below.
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thx for the link.
i’m looking to buy my first home, but can’t find a bargain buy until now -.-
it’s just too many people looking to buy a nice property at the moment. driving price up !
well, i hope i’ll get it soon ! fingers crossed
Where are you looking, what suburbs? Just don’t fall into the trap I almost did - don’t buy a house you don’t consider a bargain just because there is nothing else out there at the moment. Be patient, it pays off!
[...] presents Median prices explain what?s going on in the property market posted at Home I Own, saying, “Explanation of what’s going on in the Australian real [...]
[...] presents Median prices explain what?s going on in the property market posted at Home I Own, saying, “Explanation of what’s going on in the Australian real [...]