I noted in a previous post that you were looking at St.Kilda. I try to follow inner city Melb closely for a number of reasons, but my impression is that St, Kilda, et al had an absolutely thumping 2007, and that prices have stagnated in the last three months. I think the outlook for the rest of the year is flat, which might indicate a buying opportunity, depending on your perspective.
Living in Perth, it's difficult to follow Melb as a whole, but I'd be interested in hearing others opinions on possible hotspots for Melb in 2008.
