Home Prices Fall Quickly In Australia
The fall in home prices has spread to Melbourne in the last three months, the Advertiser tells us. "Melbourne's median house price has dropped by nearly five per cent in the last quarter, according to figures from the Real Estate Institute of Victoria."
"The median price over the March quarter was $352,000 down 4.9 per cent in the December quarter (2004). Unit and apartment prices also recorded a median price fall of 5.0 per cent over the quarter."
The price decline affected other colorfully named towns. "Geelong's median price showed a modest increase of 1.1 per cent to $273,000, however this meant a decline of 7.5 per cent over the year. Bendigo's median house price dropped 4.2 per cent, but recorded a rise of 2.4 per cent over the past 12 months.
10 Comments:
We'll know soon enough.
Oh oh, Deb, you referred to yourself as being "sane". I think you are, but that is not necessarily proof.
My wife and I sold in 2003 thinking the top was coming sometime in 2004. It will really disturb our sensibilities if the market doesn't correct soon.
But you are right, sane or insane, it's good to have company.
Wow 659k average price. All I ever hear about is the median price. What does the average house consist of.
If the median goes up more than the average, that may be an indication that the top is softening, compared with the rest.
This seems to be the case in some other markets.
I just hear of a friend who bought a condo in Lake Havasu last year. It went up 100k so he took out equity and bought another one in same place. I hope he doesn't get burned.
www.ofheo.gov publishes historical house price data for metropolitan areas. This data is based on repeat sales for houses sold with conforming mortgages only.
Deb,
Do you have a web link to those local numbers?
The risk is really high for anyone trying to time the top. Better to get out years early than one day too late.
Ben,
Are you going to post Deb's link? I would love to see these numbers as well.
Cashking
CashKing,
The numbers aren't correlated, so it must be put together in excel or word. The site is RE members only, Deb is helping me put some data together.
Ben Jones, greetings from Canberra Australia.
This is a truly amazing and enlightening blogspot. I have written down about 50 sub-topics triggered by the threads where I feel I could comment, but most of these have been covered by other posters so I have 6 or so left if you're interested.
Unfortunately my normal Internet access doesn't allow me to reply (and it looks like even now I can't set up an identity, so all my posts will be 'anonymous').
To get back to this thread's original topic; the RE bubble in Australia is OVER. More significant than the price declines is the fact that High-Rise apartment developments (the equivalent of your Condo's, I think) in several states have been cancelled because the developers couldn't get enough pre-sales to get construction finance.
Also some of the major lenders here have slapped a 20% deposit requirement on High-Rise apartments, and have significantly tightened up their valuations (= appraisals). A big (by our standards) apartment developer called Harry Triguboff is going nuts over this, maybe because he is anticipating settlement issues for the stuff currently under construction. Funny that he never complained when credit conditions were ridiculously loose!
We are now entering a period where I expect nominal apartment prices on our East Coast to grind down by maybe 5% a year for 3 or 4 years, and house prices stay static. There should be some good buying opportunities around 2009, as RE is overall a pretty good investment in Australia for country-specific reasons (E.g. Some of our legal/financial structure appears to be VERY different to yours).
I suppose you are going to be basically focussed on the US situation on this site, so if you or the other posters don't want me to keep commenting, don't be shy about saying so.
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