Melbourne’s median property prices will likely double over the next decade and Australia is not experiencing a property bubble, says Real Estate Institute of Victoria CEO Enzo Raimondo.
“The trend over the last 10 years or more has been upwards. If you look at the median price today, compared to what it was in 2000, we’ve more than doubled,” he told Channel 31.
“It will probably double again in 10 years to over $1 million. Long term the price trend is upwards.”
He concedes 2011 has not been a good year for real estate.
“It’s been a very soft year. Demand has been low. Clearance rates are down to around the low 50s from peak of 70s and 80s a few years ago.”
But given the volatility of the share market he says the real estate industry has been holding up well.
The Australian property market is at the bottom end of a cycle and will likely experience the same conditions through to mid-December, according to Raimondo.
“It’s probably the best time for first-home buyers and others to look at buying a property to relocate to, or as an investment.”
Events in Europe and the US have affected confidence in the Australian market, which is actually very strong, according to Raimondo.
“The economy is quite sound, our banking system is good. Media about what’s happening in Europe and the US dampens confidence in Australia.”
He says there is room for further rate cuts he and he suspects that while the Reserve Bank is hesitant to cut rates further, it might be forced to do so given events in Europe and the US.
“I think the RBA will look at what the economy is doing generally. I don’t think they really want to cut rates because they think there’s some strength in the economy, but given what’s happening in Europe they may have to cut it again between now and the end of next year.”
By Alistair Walsh (originally published on www.propertyobserver.com.au)