How high had prices rose before coming back down again?

[BobbyFowler]

We're living in Melbourne, Victoria. While I can't find the exact figures for Melbourne, I've read that median house prices in Victoria have jumped 164 per cent in the past 10 years. We still have 2 houses in Dublin & are debating whether to buy here in the next year or so. Property prices here are still quite expensive. I'm wondering if we'd be buying at the top of the market. I was checking around for comparable figures in Ireland. Before things started going Southwards (Feb '07 I think is the date of price peaks) does anyone have a rough idea how prices had appreciated over the preceding 10 years?

 

[Brendan Burgess]

The best guide is probably the Permanent tsb house price index.

You will probably find other data on this and a more informed answer on www.thepropertypin.com

 

[Buddyg]

Property prices here are still quite expensive.

Take about 40% off the prices on Daft and thats the actual level of prices. Nothing is selling for asking price, nothing.

 

[plant43]

Take about 40% off the prices on Daft and thats the actual level of prices. Nothing is selling for asking price, nothing.

The "here" s/he is talking about is in Australia, not Ireland.

 

[sadie]

Here is the only Irish figures available to the public, from the ERSI.
[broken link removed]

From this table:

March 1997 a 3 bed semi average price was €80,054.00
March 2007 a 3 bed semi average price was €309,675.00.

So 386% increase over 10 years?

 

[Grace80]

What about inflation? You are not factoring that into your 386%

 

[Buddyg]

What about inflation? You are not factoring that into your 386%

That is price inflation.
Adjusting a figure based on a rate of inflation that is set based on house price inflation is a strange way to analyse things.

 

[Robin Banks]

I'm suprised that someone from Dublin would find prices in Melbourne expensive.

As regards buying at the top of the market "the fundamentals" of the Melbourne property market are quite good imo. (disclosure - i own property in melbourne)

Strong net inward migration fueling demand on an ongoing basis. Unlikley to ever change.
Genuine undersupply relative to demand
Excellent infrastructure & quality of life
A well managed economy with high interest rates leaves large buffer for monetary stimulus if growth abates - as happened this year.
Currency is quite weak making investment in australian property highly attractive for wealthy asian investors.
Big culture of home ownership in Australia.
Negative gearing makes residential property investment attractive despite high interest rates.
Geography - 800kms to closest cities Sydney & Adelaide and 6-8 hours on a plane to get to a different country means you have a fairly captive market.
Relative to the rest of Australian market Melbourne is not particularly expensive. It's certainly cheaper than Sydney and Perth.

So if you're worried about a property crash in Melbourne I think it's unlikely.

 

[Robin Banks]

What about inflation? You are not factoring that into your 386%

Averaged about 4% over the period. Would account for about 50% of the 386% increase.

 

[Ian]

I am a property investor in Melbourne and I have serious concerns about a bubble in Melbourne property . There are major changes on the way for immigration quotas for Australian cities . Melbourne is straining under the pressure with infastructure ( water ) at the moment .

The first time buyers grant is causing a distortion at the bottom end of the market and will end soon . Australia has experienced several interest rate rises and more clearly flagged from the reserve bank . I think we will experience a more normal market in the near future .

The more sober media are warning of a property bubble and the tabloid media are in a buy now frenzy . Flashing red light if there ever was one .

The wealthy Asian investors are at the top end of the market and are buying land banks . This is due to a change of regulations for foreign investors by a labour government . There is some serious media pressure to reverse these regulations changes as it is causing problems at the top end of the market . Remember this is a Labour government and these changes were not meant to encourage the buying of land banks by foreign investors . It has been a major blunder by labour

Perth has experienced a fall in property prices due to the fall off in demand on the mines ( although soon to change with China on the up )

This is just my opinion and the decision to buy or not to buy is up to you .

 

[Robin Banks]

Australia has experienced several interest rate rises and more clearly flagged from the reserve bank . I think we will experience a more normal market in the near future .

So do you think it's a bubble, or do you think we will experience a more normal market in the near future?

If you think it's a bubble then you're saying it's massively overvalued relative to fundamentals so it will collapse when the bubble bursts, like what's happening in Ireland.

If you think we're going to experience a more normal market in the future then you're saying that the market will be stable with property prices growing roughly in line with the Victorian economy, wages etc.

I don't think prices are going to grow massively, indeed if they did I would not see that as a good thing as we witness Ireland with 15% unemployment, bankrupt banks having to bailed out by the taxpayer, personal taxes and national debt going through the roof to pay for the illusion of wealth created during the property bubble.

I certainly don't think property in Melbourne is undervalued. However, I don't see the This post will be deleted if not edited to remove bad language falling out of it either.