Listening to a property related show this morning and it was interesting to hear all the excuses coming out about the market and how this property expert had predicted all this. Maybe she did, maybe she didn't. I just never heard a negative thing from these people, well not until now.
The article below was part of the discussion on the show.
HOUSE prices in some blue chip suburbs have crashed by almost 40 per cent from their peak.
Data compiled exclusively for the Herald Sun reveals four of the five suburbs with the biggest price falls have some of the city's most expensive real estate.
Armadale is hardest hit. The median price plunged 39 per cent - or more than $800,000 - in 2 1/2 years.
Melbourne's auction market comes to life today after its summer break, with more than 300 properties to go under the hammer.
The Real Estate Institute of Victoria data shows nine out of every 10 Melbourne suburbs now have median prices below their best.
House prices in South Yarra, Hawthorn East and Malvern East have fallen 28 to 38 per cent.
More affordable areas including Bayswater, Braybrook, Croydon North and Macleod have also been hit hard, with median price falls of 23 to 27 per cent.
But experts said falling prices, combined with last year's two interest rate cuts, made Melbourne houses more affordable than they have been in years.
"You now have to spend less to buy the same thing you could have bought a year and a half ago," said REIV spokesman Robert Larocca. "A year ago many buyers were worried about affordability and as a result they were holding back.
"Now most suburbs have median house prices below their peak and interest rates are lower.
"Lower interest rates and lower prices add up to improved affordability."
The REIV data compares December quarter median prices with historic price highs, most in the past three years. Hawthorn hit its peak in the second quarter of 2010, with a median house price of $1,638,000. In the December quarter that figure was $1,242,500.
In the western suburbs, Footscray hit its peak of $650,000 in the first quarter last year, falling to $501,500 in December.
Mr Larocca said it was not surprising the top end of the market had been hit hard.
"The upper end of the market, due to volume (of sales) and the type of homes in question, rises and falls faster," he said.
Last year had one of the lowest number of property sales in about 10 years.
In 2007, there were almost 110,000 residential sales in Melbourne, compared with 78,500 in 2010 and about 70,000 last year.
Melbourne house prices fell 5.2 per cent last year but rallied slightly in the December quarter, up 1.9 per cent on September.
