Antonia Magee From: Herald Sun April 01, 2010 12:00AM
MELBOURNE’S house prices have outperformed every city in Australia, new benchmark real estate figures show.
According to Rismark International’s Australian housing report, released yesterday, in the three months to the end of February, Melbourne’s property prices grew 5.4 per cent.
In the same quarter property in Darwin increased 4.2 per cent, the Sydney market was up 3.8 per cent and Adelaide rose 2.5 per cent.
Over the year to February, Melbourne’s prices were up an impressive 19.9 per cent.
The Reserve Bank uses Rismark’s data when deciding whether to raise, stay or lower interest rates.
Rismark’s chief executive, Christopher Joye, said Melbourne’s booming market was on the back of strong population growth.
“Melbourne is probably the single most attractive destination for migrants coming into this country,” Mr Joye said.
Commonwealth Bank chief economist Craig James echoed Mr Joye’s response and said: “Growth always comes down to an imbalance of supply and demand.
“We are seeing the strongest population growth in Victoria since the 1960s,” Mr James said.
“Effectively, a lot of people are running into the state from overseas or interstate but developers are not keeping up.”
While there may be impressive growth in Melbourne and other major cities, the data showed the rest of the state was not keeping up.
“The rest of Victoria’s data has only appreciated 9.9 per cent – that is half the rate of the city house measures,” Mr Joye said.
Melbourne’s market has been a hotly debated topic for the past year as economists, real estate agents, experts and consumers argue whether the city’s property market is in a highly stressed bubble.
Mr Joye said this was not the case and the RBA was doing everything in its power to steer the national property market to safety.
“What the RBA is worried about is the risk of a major housing boom feeding into a mortgage growth, and then mortgage growth in turn feeding back into prices where you get a bubble.
“They categorically don’t believe there is a bubble right now,” Mr Joye said.
