A fairly ordinary weekend for auctions although the dailies reported some extraordinary prices for properties in the inner suburbs,namely Camberwell and Richmond where expectations were exceeded.                                      
 
Of course this time of year is not the best gauge of the market or auction results.I’ts cold,the snow season is on,school holidays are near their end and most Vendors will be holding back for better weather. However the paucity of stock can be beneficial to Vendors.                                          
 
General sentiment re interest rates,share prices and market conditions is not good and it is being reflected in the property market.
 
Demand will build and put pressure on so we expect an improvement in results at auction and other means of sale.
 
An interesting and usually overlooked stat. is that auctions only make up aproximately 30% of all sales. However most commentators use auction results as their barometer of market conditions.
 
In a forthcoming article we will talk about sales reporting.

APARTMENTS
 

The developer of the old CUB site at the top of Swanston Street recently announced that he would build a high-rise tower that would offer, amongst other things, “affordable housing”.

The building would have accommodation ranging from one bedroom to two and three bedroom apartments.

Hardly “affordable”.  Consider some prices for the basic one bedroom apartment being offered elsewhere in the city.  Prices range from $265,000 to $400,000.  Hardly affordable housing for families.  However very affordable for wealthy overseas students and property investors.

High-rise residential towers however do provide quality living usually in a city or near city location and offer “lifestyle”.  However beware of management fees, which are very high and are an additional cost to rates, taxes and utility charges.

LAND
 

Recently Tony De Dominco from the Urban Development Institute stated the Federal Budget would be helpful to first homebuyers, but would not solve housing problems.

He said the way to solve housing problems was to release more land???

Sounds great but to whom is it released – land developers, who land bank and then release it to suit their schedule, which relates to demand for their particular product and their ability to develop the infrastructure to service the land?

Usually new releases are out in the “boondocks”, far from public transport, schools and other services.  Not exactly where families will buy.

Land developers control land, not the government.

REIV reports on 11 May 2008, data shows that despite the recent reduction in the median price of a home in Melbourne the last twelve months were the strongest in 10 years.

In the twelve months to the march quarter the median price of a home increased by 14 per cent or $54,500 from $378,000 to $432,500. This period of rapid escalation in demand surpassed, in 12 months, the gains over four years between March 2003 to March 2007 when the median increased by 10 per cent or $33,000 from $345,000 to $378,000.

Analysis of the historical data also shows that the median price of a home in 1998 was $186,000.

The underlying strength of the local housing market is underscored by the Australian Bureau of Statistics which in its March index of capital city prices showed that the weighted average of a house in Melbourne increased by 25.9 per cent, the highest of any capital city. Second was Adelaide at 21.6 per cent and third was Brisbane at 20.8 per cent.

The primary driver behind this growth has been population growth.

This is good news for most homeowners and investors as in the majority of cases an investment in bricks and mortar is a longer term one. Homeowners will monitor changes in value over the short term but the true comparison is between what they first paid, what the value is when they sell and importantly, the price of the home that they subsequently purchase.

(Source: REIV  11-May-2008, News Section, Web)