Have a read of the spin I cut paste from a letter from one of the biggest agents In The Eastern suburbs,
"Real estate in 2011, affected by overseas market sentiment, offered sedate price growth, less demand and some owners deferring home sales.
Although the media has reported falls in Melbourne’s median price between recent quarters, the annual figures tell a different story. The September 2009 median price was $520,000, followed by $543,000 in September 2010 and $551,000 in September 2011. December 2010 provided a timely reminder that property prices can fluctuate in the short term with a price spike of $601,000. In addition, rpdata.com highlighted that “capital gains over the past 12 months have been well below both the five and ten year average level of value growth.” The longer term growth outlook is much more promising with limited new housing supply, above average population growth, low unemployment and wages growing faster than inflation.
From an economic perspective, the mid-year federal budget update released on November 29th suggests that Australia’s economy is set to experience lower growth over the next 12 months. This negative sentiment has now led the Reserve Bank to cut interest rates again in December by 0.25%, down to 4.25%. This is the first back-to-back cut since April 2009, and with talk of the possibility of further cuts in early 2012, this is creating a real incentive for property buyers to re-enter the market.
Real estate markets are of course cyclical, currently our position in the cycle would suggest that now is an ideal time to buy a first home or to ‘trade up’ to the next property."
