Home prices rise by 10 per cent

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first_img Facebook Twitter: @NeosKosmos Instagram Australia’s capital cities may be reaching new highs, after home values in eight capitals rose by 9.8 per cent over the 12 months to 31 December 2013. In Melbourne, median home value rose 8.5 per cent last year, while median unit values rose 8.7 per cent, to a record $481,000, RP Data-Rismark’s December home value index shows.Melbourne house prices increase comes after Sydney and Perth house value rises, that are now 15.2 and 10.2 per cent respectively more expensive than they were in December 2012. According to RP Data-Rismark, in comparison with rising home values across Australia’s capital cities, wages growth in 2013 has been less than 3 per cent.A study of housing affordability last year found Melbourne was one of the world’s least affordable cities, with its median-priced property costing seven and a half times the median annual household income.The Demographia International survey, which ranked cities in seven countries based on house prices against income, found Melbourne was less affordable than New York but more affordable than London.According to The Age, an independent Fairfax Media analysis found that 50 years ago, Melbourne house prices were about three times annual income. Relative to income, this means houses today are two and a half times more costly than they were in 1964.The median house price in Melbourne hit $625,000 in December, still 0.9 per cent below the peak of October 2010. Angie Zigomanis, senior manager at commercial property analysts BIS Shrapnel, told The Age most growth in Melbourne had been in inner and northern suburbs, while the outer suburbs had been flatter.”People in Melbourne’s outer suburbs are more working in manufacturing or retail, areas that are more under pressure in the economy, leading to a lack of confidence,” Mr Zigomanis said. ”Whereas people in the middle suburbs have been able to take advantage of those lower interest rates to wade into the market.”Source: The Agelast_img

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