Why are property prices falling in some Melbourne suburbs?
Date: 13 Mar 19
In Melbourne, there are prestige suburbs like Toorak, where buyer demand will always exceed the available supply and so, future sale prices will astonish most property analysts. People with new wealth and those controlling old money, compete with their cheque book for blue chip long term investment opportunities and therefore, anyone looking to own a part of Melbourne's best areas, will always have to meet the market. So, why are members of the "property media" reporting that property sale prices are lower than those of a few years ago?
The Australian economy is made up of different sections of the marketplace. There is the World of senior executives and successful entrepreneurial families where money is plentiful and there is the "real Australia" where salary and wage earners are finding it very difficult to pay every bill on time and to save money to pay for future dreams.
Senior executives and aspirational entrepreneurs can afford whatever is required to buy a home in exclusive suburbs.
The majority of people living and working in city and rural Australia, have a tough life. For many, their expenditure is greater than their incomes either as singles or as partners. Many Australians simply cannot afford to accumulate a large package of cash for a deposit on a house, stamp duty on the purchase and legal fees. That is why house and land sale prices are falling. It is because demand has decreased.
REIV CEO Gil King spoke of the importance of property to the economy.
“The REIV represents more than 2300 real estate agencies and almost 5000 individual members throughout Victoria. These businesses employ more than 15,000 people in Victoria in a market that handles around $76 billion in transactions totalling 20 per cent of Gross State Product."
"Property has underpinned our economic activity over the past decade – it’s really been the equivalent of WA’s mining boom - and we need a sound legislative, policy, infrastructure and funding base around that if we want this to continue."
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