A Solid Year of Recovery - But Quieter One to Follow

04 February 2014

A Solid Year of Recovery - But Quieter One to Follow

The Age, Domain.com.au, Page 4, January 31 - February 2014

by Dr Andrew Wilson

The Melbourne median house price increased by 8.6 per cent over 2013 – the best performance since 2009 when prices rose by 17.3 per cent.  Just-released Australian Property Monitors data shows house prices increased 3.2 per cent in the December quarter alone, which was the highest quarterly rise since the March quarter in 2010.

The median price now stands at a new peak of $568,824, finally surpassing the previous high of $560,438 set over the June quarter 2010. 

Melbourne’s unit market has also recovered, reaching a new peak.  The median price of $421,759 is higher than the $416,203 recorded over the June quarter of 2011.  Growth was 3.1 per cent over the December quarter for an annual rise of 6.8 per cent.  This was the highest quarterly increase in median unit prices since the December quarter 2009. 

Historically low interest rates and rising confidence encouraged changeover buyers and investors through 2013. 

Strong end-of-year momentum will ensure a solid start to 2014, particularly in the hot spots of the inner east and outer eastern suburbs. 

But Melbourne house-price growth this year will likely be about half that of 2013, with most the increase occurring in the first half.

A fading economy, a stagnant stockmarket and growing unemployment are among the threats. 

Auction season begins this weekend, with 71 properties set to go under the hammer.  Buyer activity should reflect the solid energy and confidence of late last year – for now.  

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