REIV March quarter medians show decline in house prices

The REIV March quarter figures show a 3.1 per cent decline in the Melbourne median house price, highlighting the impact of the slowing economy and importance of the financial assistance to first home buyers.

REIV CEO Enzo Raimondo said that the median price of a house in the March quarter was $410,000, down from $423,000 in the December quarter and the impact of lower interest rates, increasing population and financial assistance for first home buyers has clearly helped the market.

“It is clear from our figures that the first home owner’s financial assistance has been critical in driving demand for housing over the last few months.

“The fact that 15 of the 20 top growth suburbs for the quarter have a median price of under $500,000 is a sign of first home owner activity as the maximum grants are only available for homes under that value.

“For instance Mount Martha increased in value by 16.3 per cent, Keysborough by 12.9 per cent, Epping by 8.1 per cent and Boronia by 6.9 per cent.

“Growth suburbs popular with the first home buyers such as Craigieburn, Hillside, Caroline Springs, Werribee, Narre Warren and South Morang have dominated the highest growth suburbs over the last 12 months.

“I expect to see more first home buyers active in the market in the lead up to 30th of June when the State Government Bonus and Federal Government Boost cease. The REIV recommends that both are extended in the respective budgets.

“Prices for units and apartments have been more stable, declining by only 0.8 per cent from $363,000 to $360,000 in the March quarter.

“Key centres in regional Victoria have recorded more diverse results: the median price of a house in Greater Ballarat increased by 8.2 per cent from $227,500 to $246,250; in Greater Bendigo it increased by 0.8 per cent from $240,000 to $242,000 and in the City of Greater Geelong it declined by 3.8 per cent from $329,000 to $316,500, a result that is line with metropolitan Melbourne’s.

“With most of the grants forecast to cease on 30 June the health of the economy will be what determines house prices in the second half of the year” Mr Raimondo concluded.