As Melbourne’s rich and famous duke it out for control of the majestic Stonington Mansion, the rest of the populace have been sifting through the latest house price data to see the value of our dwellings.

Tim Colebatch’s article on Melbourne house prices comes to the same conclusion as this blog entry on Sydney prices from a month ago: the property boom of the last decade has to a large extent been concentrated in areas close to the CBD and the coast.

…two things determined how much your suburb or town rose in price over that giddy decade: how close your house was to Melbourne, and how close it was to the coast.

Colebatch quotes figures from the Valuer-General’s annual review of Victorian property prices, A Guide to Property Values 2005, which indeed is scary reading – surely such prices leaps will never be seen again.

HIA home sales figures for November, released this morning, show that the new home sales market is currently at depressed levels – HIA’s New Home Sales figures found that the sale of new homes and units fell by 5.3% in November to 7,097 dwellings.

The HIA New Home Sales Survey, the leading index of its kind, found that although sales of multi-units jumped by 8.8% in November (after a fall of 16% in October), private detached house sales fell by 7.5% to their lowest level since December 2000.

The main driver behind this month’s fall in new home sales was the slumping resource-poor states of Victoria and New South Wales – for the month of November, detached house sales fell by 28.6% in Victoria and 14% in New South Wales. The picture was more positive in the other states – house sales increased by 14.5% in South Australia, 12.3% in Western Australia, and 4.3% in Queensland.

This was a fairly predictable turn of events; this year’s three rate hikes have evidently hurt those in the states that weren’t performing well, but they have hardly had an impact upon the booming states.

HIA Chief Economist, Mr Harley Dale said new home sales market has had its wings clipped:

It was all well and good to talk of a recovery in building approvals earlier in the year, which itself has now been snuffed out, but with affordability at record lows there are simply not enough people out there who can afford to buy.

Read more at Henry Thornton.

Peter Fray

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