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Melbourne Housing Market Update

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    From The Age

    Houses up, but market gets shaky
    October 26 2002
    By Hugh Martin

    Median residential property values grew 1.1 per cent in the September quarter, yet in several inner Melbourne suburbs, more than $50,000 was stripped from the value of houses.

    Hardest hit, according to the Real Estate Institute of Victoria's list of quarterly median house prices, were inner bayside suburbs. St Kilda and East St Kilda lost $19,750 and $47,000 respectively. Nearby, Elwood and Elsternwick lost $54,500 and $53,750 respectively while Albert Park also lost $50,000.

    The results illustrated the market fluctuations of the past three months, with suburbs at both the top and bottom of Melbourne's price ladder experiencing dramatic rises and falls.

    A glut of poorer quality rental properties offered for sale in the September quarter dragged down median values in some suburbs, Hay Property Consultants managing director Peter Hay said.

    Global economic uncertainty in the quarter caused some investors to offload long-held rental property that was no longer achieving good returns in a saturated rental market, Mr Hay said.

    This had combined with a lack of quality properties for auction, owner-occupiers choosing to ride out the uncertainty.

    "There was a lot of B-grade property for sale, then that was passed in and sat around for a while," Mr Hay said. "People who had good property were getting anxious and were sitting tight."

    The use of the median price figure tended to skew results, he said. This could cause neighbouring suburbs that shared many similarities to have markedly different results.

    Many fluctuations could also be explained by low auction numbers for the quarter. Several suburbs recorded less than 30 auctions for the period.

    Mr Hay said the market, while unlikely to enter a new growth cycle, was so far performing well in the December quarter.

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