Melbourne Homes To Hit $1m In Decade - On Par With Sydney

Greg Thom From: Herald Sun January 20, 2010 12:00AM

Real estate analysts predict the median price of a house will be $1,166,344.

According to property expert and wealth creation author Michael Yardney, the trend will be repeated in every capital city across the nation.

“They (house prices) are likely to be closer to $1.5 million,” he said.

The prediction comes after a record year in Melbourne’s overheated property market, which continued to boom despite the global economic crisis.

Statistics compiled by Mr Yardley from a variety of real estate sources including the Real Estate Institute of Australia, show house prices in Melbourne grew from an average $230,500 in October 1999 to $518,500, an increase of more than 124 per cent.

“A lot can happen in 10 years,” Mr Yardney said.

“Median house prices have more than doubled in every capital city and in some cities property values have gone up more than 200 per cent.

“These increases have occurred despite a recession in 2001, a change of government, periods of high interest rates and the global financial crisis,” he said.

Continuing its reputation as the most expensive property market in the country, Sydney is tipped to be home to the highest-priced properties.

Average house prices in the Harbour City are tipped to be more than $1.2 million by 2019.

“Our major cities of Melbourne, Sydney and Brisbane are growing at an enormous pace and are bursting at the seams,” Mr Yardney said.

He said some forecasts suggest the population of all three cities, including southeast Queensland, could each grow by 700,000 people over the next 10 years. This should create a building boom and lead to economic prosperity that gives home owners and investors the confidence to invest in property.

“We are moving into a new economic cycle with record population growth fuelled by rising immigration and a baby boom,” Mr Yardney said.

He said we need more dwellings for the same number of people, because we are living in smaller households.

“However, we have a shortage of housing, vacancy rates are low, rents are rising and the cost of new construction is escalating,” he said.s

“It becomes even more fascinating when you consider that Melbourne and Sydney will each require around 50,000 new apartments over the next ten years,” said Mr Yardney.

“This is equivalent to 250 high rise buildings, each accomodating 200 apartments.”