Melbourne property market 'flat as a pancake' but the worst is behind us: Monique Sasson Wakelin

The Melbourne housing market is currently treading water, according to Monique Sasson Wakelin, who describes the property market as "flat as a pancake over June 2012 quarter". Wakelin reached that conclusion by averaging out divergent housing price data from different analysts.

Rather than enter into the current debate over which data provider is "right", Wakelin says “the truth probably lies somewhere in the middle”.

“We like to consider all of the data sets and then report an average of all the results for the national market. We do the same for the Melbourne market by adding in the recently published data from the Real Estate Institute of Victoria,” she says.

The average Melbourne house price data as reported by the ABS, RP Data-Rismark, Australian Property Monitors, Residex and the REIV showes an average quarterly decline of 0.12%, with prices down 5.14% over the past 12 months.

Melbourne housing market

A similar pattern for the national data emerges of a small quarterly decline (-0.25%) and larger 12 month fall (-2.65%).

Writing on her blog, Wakelin says the averaged figures pass the “smell test”.

“They concur with what we see and hear around the country – that is, prices are probably down around 5-10% or so across our major capital cities over the last 12 months, but that the market has been reasonably steady in the last quarter, as participants begin to respond to lower interest rates.

“While these figures are by no means definitive or irrefutable evidence that the property market has bottomed, they should give investors and home buyers a fair degree of confidence that the worst is behind us,” Wakelin says.

In his June quarter update, REIV chief executive Enzo Raimondo made similar observations about the Melbourne property market.

Raimondo says a combination of "broader economic factors, slowing population growth and continuing low levels of consumer confidence, have resulted in no real capital growth in the residential market this year".

“Both buyers and sellers are approaching the market in a conservative manner. This is translating into a lower number of sales than is present in a strong market and as a result, no real price growth has been recorded," Raimondo says.

“The real estate market moves in cycles and, after the initial price falls in 2011, it is now in a period of stability marked by low activity.

“The median price has fallen 5.3% over the past 12 months but, as the overall median has not changed in the past six months, this indicates that the market has plateaued and is likely to remain like this until confidence improves."