MELBOURNE has just experienced its fastest property boom since the turn of the century, according to new analysis from the Real Estate Institute of Victoria.
The boom has added a median $104,500 to house prices in just nine months after prices leapt almost $35,000 (6.3 per cent) every quarter (three months) from June last year to the end of March this year, according to the REIV figures.
It comes as separate figures from RP Data show more than eight in 10 Melbourne homes sold in the first three months of the year collected a profit of at least 10 per cent.
But the surge in values appears to be over for now.
The REIV figures show the latest market surge, from June last year to March this year, outpaced the $23,900 per quarter growth of the most recent boom, from December 2008 to June 2010, and easily eclipses the $20,000 per quarter growth of the 2006-2007 cycle.
In percentage terms the jump has only been surpassed once before, in the 12 months ending in September 2001, when prices rose 7.9 per cent ($18,625 at the time) every three months of the boom.
“This one is certainly the strongest we have seen since 2000-2001 and it’s the strongest in the shortest time,” said REIV chief executive, Enzo Raimondo.
The REIVs figures since March have shown slower growth and Mr Raimondo believes falling consumer confidence will result in a fall in clearance rates at auctions and softer market conditions until October.
“I don’t believe we will see this 6.3 per cent growth in this next quarter,” Mr Raimondo said.
“This one has shot up very quickly and strongly and that suggests to me that it’s not sustainable at that level.”
That said, he believes reasonable growth will continue in some suburbs for a while yet — especially those with high demand, but also in a handful of suburbs that saw strong growth in the three months to March and have a median price below the wider Melbourne median.
Separate figures from RP Data released this week show more than 81 per cent of Melbourne homes sold in the three months to March this year made at least a 10 per cent profit over their initial purchase price.
The RP Data Pain and Gain report showed an incredible 100 per cent of sales in the Murrindindi and Moorabool council areas for the period made a profit.
Meanwhile 28 of metropolitan Melbourne’s 35 council regions reported median profits above $110,000.