Market Update December Quarter 2011

Written by Paul Kounnas Wednesday, 01 February 2012

Median house prices across Melbourne rose by 1.9% in the December quarter. According to median house data released by the REIV the Melbourne median house price is now $550,000, up $10,000 in the last three months.

The doom and gloom experts who predicted a crash in property values in 2011 got another year wrong. What we experienced instead was a year of controlled price adjustments.

Some experts are predicting that the market may have bottomed out. However the positive data from one quarter is not enough evidence, particularly with median house prices which historically can often swing wildly from quarter to quarter. We have to wait and see what happens with the economy over the next three to six months.

Some believe the property market in 2012 will return small positive gains on the back of the recent interest rate cuts.

The performance of units and apartments during the quarter also had a small increase, mirroring the house market.

The continuing uncertainty about the international economy means our property market will remain subdued. Once the right polices are implemented overseas we’ll see consumer confidence lift and so will property prices.

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