The Real Estate Institute of Victoria (REIV) believes that conflicting data regarding the Victorian Property Market has left home owners confused.
The Real Estate Institute of Victoria (REIV) believes that conflicting data regarding the Victorian Property Market has left home owners confused.
Data from Australian Property Monitors indicated a significant crash in prices had occurred within the Victorian residential property market over the first three months of this year. The REIV’s own data on the other hand indicated that the slowdown was more of a “soft landing”.
The REIV figures for the March quarter of 2004, indicated that median house prices had fallen 0.8 per cent to $368,000, while the Australian Property Monitors data suggested that prices had fallen 12.9 per cent to $270,000 over the same period.
Mr Raimondo, CEO, REIV, said “if you are confused about the state of the market and property prices, it is no wonder with the conflicting reports from various commentators.
“Overall, house price growth has peaked with modest increases predicted over the short term. Activity in the residential market has slowed, though prices may fall in some areas and sectors of the market that are already weak.
“The REIV, along with most banks and economic forecasters, has predicted a soft landing for Melbourne property prices.”
Mr Raimondo said “the release of APM’s 12.9 percent came as a surprise to most market analysts. It is very unlikely to have a decrease of that magnitude in one quarter.
“More importantly, it is irresponsible and unnecessarily alarmist for APM to release these figures and not to provide an explanation on how this large decrease was calculated.
“The REIV collects its data at the time of sale from over 700 estate agents, mostly within the metropolitan area. We use the same data sets for comparison and include sales from over 320 suburbs within Melbourne. We know our median calculations are correct.”
“The following median price in Melbourne for the months June 2003 to March 2004, confirms the soft landing:
The REIV figures for the March quarter of 2004, indicated that median house prices had fallen 0.8 per cent to $368,000, while the Australian Property Monitors data suggested that prices had fallen 12.9 per cent to $270,000 over the same period.
Mr Raimondo, CEO, REIV, said “if you are confused about the state of the market and property prices, it is no wonder with the conflicting reports from various commentators.
“Overall, house price growth has peaked with modest increases predicted over the short term. Activity in the residential market has slowed, though prices may fall in some areas and sectors of the market that are already weak.
“The REIV, along with most banks and economic forecasters, has predicted a soft landing for Melbourne property prices.”
Mr Raimondo said “the release of APM’s 12.9 percent came as a surprise to most market analysts. It is very unlikely to have a decrease of that magnitude in one quarter.
“More importantly, it is irresponsible and unnecessarily alarmist for APM to release these figures and not to provide an explanation on how this large decrease was calculated.
“The REIV collects its data at the time of sale from over 700 estate agents, mostly within the metropolitan area. We use the same data sets for comparison and include sales from over 320 suburbs within Melbourne. We know our median calculations are correct.”
“The following median price in Melbourne for the months June 2003 to March 2004, confirms the soft landing:
Quarter Price Quarterly Growth
2003 Mar $347,000 3.6 per cent
June $359,000 3.5 per cent
Sep $368,000 2.5 per cent
Dec $371,000 0.8 per cent
2004 Mar $368,000 -0.8 per cent
2003 Mar $347,000 3.6 per cent
June $359,000 3.5 per cent
Sep $368,000 2.5 per cent
Dec $371,000 0.8 per cent
2004 Mar $368,000 -0.8 per cent
“In Australia, a house price crash is always accompanied by a recession, as in the early 1990s. It would take a major increase in interest rates (and the Reserve Bank of Australia has signaled that major rate rises are unlikely in the short term), high unemployment, a severe economic downturn and a massive slump in underlying demand. These fundamentals are not evident in this current property cycle.
“Established properties close to the city and beaches will still be in demand and the opportunities will be for properties that are unique.
Finally, there is a continuing underlying demand for property due to the strong interstate and overseas migration into Melbourne,” he said.
At the time of writing, figures for the June quarter were not yet available, although indications are that the Melbourne market had experienced a slight increase over the previous quarter.
“Established properties close to the city and beaches will still be in demand and the opportunities will be for properties that are unique.
Finally, there is a continuing underlying demand for property due to the strong interstate and overseas migration into Melbourne,” he said.
At the time of writing, figures for the June quarter were not yet available, although indications are that the Melbourne market had experienced a slight increase over the previous quarter.