Melbourne Property Report                                        We add colours to life

After ten years of growth , Melbourne property prices are going down finally. Analysts say they will go down upto 40% in most of the suburbs. Higher number of immigrant intake  and  willingness of investors  to take a gamble were the main reasons for the property prices to sky rocket. A  comparison of the property prices and average family income, is more than enough a reason to believe that property prices at this level are unsustainable. Many of the sensible financial planners are advising their clients not to offer more that 70% percentage of the advertised price at auctions. In six months time, the market will see at least 20% fall in median price of a Melbourne home.

Auction clearance rates have fallen to 53% from its highs in 2007 . It was amazing 83% on those days , around 30% fall in auction clearance rate is a clear indication of what is ahead. Already the market has seen 3.3% slump in prices. Property developers are reporting around 10% drop in earnings in the current year. As far as the property market is concerned it is all doom ahead until 2011 after that it is reasonable to estimate that the first home buyers who has taken up the government investment scheme will come out to market in large numbers.

In the current market , first home buyers should be waiting for another year to see the market come down around 30 percentage before they put their hard earned money in.

Northern suburbs will be the hardest hit, because of the new land releases and concentration of some ethnic minorities in those areas.