asic to punish bis shrapnel for unlic advice

well they should, this article is a disgrace !!

http://www.heraldsun.com.au/news/victoria/an-average-melbourne-property-will-cost-a-massive-1-million-in-12-years/story-e6frf7kx-1225787726434?from=public_rss


An average Melbourne property will cost a massive $1 million in 12 years

Craig Binnie From: Herald Sun Sat Oct 17 2009

THE median Melbourne house price will burst through the $1 million mark in just 12 years if prices rise at the same rate as they have over the past 43 years.

THE median Melbourne house price will burst through the $1 million mark in just 12 years if prices rise at the same rate as they have over the past 43 years.



Property research company BIS Shrapnel forecasts the median house price will be $1,056,199 in 2021.

The staggering prediction shows the importance of buying a home as soon as you can afford it because the longer buyers delay, the more chance there is that their dream will slip out of their reach.

House prices have risen by an average of 9.4 per cent a year since 1966 when a house could be bought for just $9350, according to BIS.

Last month the median was $525,000, says the Real Estate Institute of Victoria.

With a $1 million-plus median, most home loans will start about $900,000 and require repayments of $1337 a week at an optimistically low interest rate of 6 per cent.

If prices keep rising at the same rate between now and 2048, 39 years from now, the median house would cost a massive $5 million.

The figures back up the real estate agent mantra: "Now is a great time to buy".

Low interest rates, the rising cost of materials, a shortage of new homes and a growing population are predicted to keep pushing prices higher.

BIS senior project manager Angie Zigomanis said inflation and rising wages would keep increases in proportion to house prices.

Just as an average wage earner could buy a $9350 home in 1966 and today's first home buyers can buy a $525,000 house, future first home buyers will, hopefully, be able to afford a $1 million house.

Mr Zigomani said the inflation rate, which is 1.5 per cent, would have a big impact on future house prices.

"Through the 1970s and 1980s, inflation was very strong and this helped push house price growth," he said.

"On average, inflation was nearly 6 per cent per annum, so prices rose by an average of 3.5 per cent above inflation - the difference between price growth and inflation.

"Assuming that the Reserve Bank manages to keep inflation down to its 2-3 per cent range (say an average of 2.5 per cent), then price growth should average 6 per cent per annum long term."

If inflation is higher, house prices could rise even faster.

The REIV said the figures showed the importance of implementing strategies to provide affordable housing.

"It was only 10 years ago that the median house price was half what it is today, and unless there is a significant increase in supply then it would not be surprising to see the median reach $1 million in that time," spokesman Robert Larocca said.

"To ensure homes are affordable, the growth in supply needs to match population growth."