MELBOURNE’S Property Prices Plunged
May 10th, 2009 | by winsonlee |The map shows the annual change of price between Mar 2009 and Mar 2008.
Property in the inner east suburb has decreased significantly. Those area are highly priced and has increased significantly for the past few years. Now the price has pulled back to a more realistic level. Most of the areas in the east and south east are in red. Only a handful which are still appreciating during this time. Thou many area has shown sign of slowing down, but since the Federal Government has imposed the First Home Owner Boost, it has increase the demand for property. Although I do not have an economic degree or PHD, but i strongly believe that nothing is able to escape from the cycle. Oil price went up to $147 in July 2008 before retracting to marely $30 / barrel. The share market reach the level of 6750 before slumping down to 3145. Gold price reaches a high of $1088 before pulling back to $783. This applies to all the commodities as well eg iron ore, alluminium, copper, zink and silver.
I read the following article and the point stated is similar to what i have posted previously. I am not the only person whom have such thought and i believe there are 101 people out there who are thinking the same as well. I am not interested to take up th $24,000 grant. But i am more interested to know what will happend to the property price after the grant is over. After June 2009, people who are buying establish house is only getting peanuts from the government. Majority of the houses in eastern and south eastern suburn are establish houses. Only suburb like Pakenham, Cranburne and Berwick has land to build new houses. Those area are partically 50km away from the city. Last time I used to not go down to the city so often. Now i go down alot more often and distance is something I will have to take into consideration as well.
If the price of new homes is being pushed up by the government grants, should people wait until after June 30 when the prices could reduce? Or should they buy now with the extra grant money?
According to AccountantsRus chief executive, Adrian Raftery, first time and budget buyers should wait until the market settles down before taking a plunge into home ownership.
“The first home owners grant is merely inflating the property prices being paid by the size of the grant,” Mr Raftery said.
“You think we would have learnt from the credit crunch.
“Low interest rates and government grants have led to inflated housing prices again ignoring the recent lessons of the global financial crisis.
“I would rather miss out on $24,000 from the government than to lose $50,000 or $100,000 down the track,” he said.
The Government should shift first time buyers’ focus to the federal savings deposit scheme and encourage people to save a bigger deposit before buying, he said.
“It should be mandatory for potential buyers to have a 20 per cent deposit to reduce loan defaults as well as avoid mortgage insurance,” Mr Raftery said.
The Money Managers managing director Kevin Bailey said the government grants have created a “massive market distortion” and over-inflated house prices in first home buyer markets.
“It could be attracting home buyers that would otherwise be unable to afford to buy,” he said.
“Not only are first home buyers propping up the housing market with their government subsidy but they are doing it mainly with variable rate mortgages, which is a recipe for disaster,” Mr Bailey said.
Source : http://www.news.com.au/business/story/0,23636,25391569-5013951,00.html?from=public_rss
