melb price dive worst in australia

Melbourne price dive worst in the country

Nicola Webber, Jessica Craven From: Herald Sun September 01, 2011 12:00AM
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New data show house prices in Melbourne have fallen by 6.2 per cent. HWT Image Library

UPDATE 7.53am: MELBOURNE house prices have suffered the biggest falls in Australia, losing more than $33,000 in six months.

The latest RP Data-Rismark statistics show Melbourne is pulling down the nation's property market.

The median house price across Melbourne is now $501,500, which is down 6.2 per cent in the six months to July.

Apartments fared slightly better, down 4.3 per cent to $425,000.

Scroll down to see how long it takes to sell a house in your suburb

Across Australia, capital city house prices fell for the seventh month in a row, down 3.4 per cent.

RP Data research director Tim Lawless said Melbourne property prices had rocketed 29 per cent during 2009 and last year.

"You have to expect that level of growth was clearly going to be unsustainable," he said.


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"Melbourne is slowing at quite a rapid rate."

But Mr Lawless said the top end of the market was responsible for most of the price falls.

Premium property prices had tumbled almost 10 per cent in the past year.

"That compares to (a fall of) 0.3 per cent at the most affordable end of the market," he said.

Falling house prices and a lack of buyer confidence are buffeting Melbourne's property market.

Auction clearance rates have lingered below 60 per cent for 19 weeks, as would-be buyers keep their hands in their pockets.

It comes as a separate survey shows revealed home builders believe consumer confidence is the biggest threat to the prosperity of their sector.

Of those who responded to the Master Builders Business Sentiment survey, 20 per cent said a lack of consumer confidence was the biggest single threat to profitability while a further 18 per cent said excessive or inefficient planning regulations were the biggest threats.

However, the outlook for the coming 12 months was positive with 60 per cent saying they expected business activity to improve and 58 per cent saying they expected profitability to also rise during the next year.

Executive Director Brian Welch said it was heartening to see that residential builders were undeterred by the "mass hysteria" surrounding the residential property market.

"Our members are telling us that they understand that consumer confidence is having an impact on the industry, but they expect that contraction to level out over the coming year," Mr Welch said.

"This can be explained by the fact that 63 per cent of respondents said they have at least 4 months of work on their books with 14 per cent reporting they have more than a year?s worth," he said.

"These builders are not deterred by current economic uncertainty and continue to plough ahead."

The latest statistics come ahead of the Saturday start of Melbourne's spring selling season, which experts believe could be a buying bonanza for house hunters.

"It is absolutely a buyer's market," Mr Lawless said.

Real Estate Institute of Victoria spokesman Robert Larocca said buyers were well placed to make the most of the market.

"Prices have peaked, affordability has become a concern, people have become more conservative and auction clearance rates are down," he said.

Rismark International economist Christopher Joye said an interest rate cut would help house prices recover.

"If rates do remain on hold, or begin to fall, we would expect to see Australia's housing market find a base and begin to generate capital gains again," he said.