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The following article appeared in
the Herald Sun on Saturday 9th. July 2011
Market Shows Maturing Signs by
Enzo Raimondo (Home Truths)
Next weekend the REIV will release
it's June quater mediean prices for houses, units and
apartments.
It is therefore interesting to
reflect on the relative changes in capital gains in each of the
property types during the past decade.
In the past 10 years until March
quater this year, the median price of a house had increased by
$295,000 - or 109 per cent - from $270,000 to $565,000.
This takes into account the fact that
the median price dropped in the March quater.
In comparison a unit or apartment
increased by $244,000, or 113% from $216,000 to $460,000.
This shows capital growth for both
dwelling types is broadly similar over the long term. Results will,
of course, differ according to the location and type of
dwelling.
This is further evidence the unit and
apartment market has fully matured in Melbourne during the past
decade.
It is also interesting to note that
within that decade, the data reveals the capital growth was higher
in the second half - between 2006 and 2011 - than in the first half
for both classes of dwelling.
This is because of a failure of the
supply of homes to match the demand, thanks to increased
populationgrowth between 2006 qnd 2010.
Population growth has lessened in the
last year and the rate of dwelling construction has increased. This
should, if the trend continues, act to ensure house prices grow at
a more sustainable rate over the medium term.
Enzo Raimondo is chief executive
of the Real Institute of Victoria | 