Melbourne real estate on the rise

TALK of a real estate price surge in Melbourne since the start of the year gets little support from the first house price data survey for the June quarter. It shows prices rose at a solid rather than spectacular rate for the first six months of the year.

Median houses prices in Melbourne rose by 6.5 per cent in the year to June 30, according to data provider Residex. For the June quarter, growth was just 0.4 per cent.

The Residex data precedes the release of the closely watched figures from the Real Estate Institute of Victoria, which will be issued on Saturday and the Australian Property Monitors survey, which is due to be released today.

Residex chief executive John Edwards said the Melbourne market had been growing faster than Sydney for several years now and had been helped by strong levels of international migration into Victoria.

He expects the Melbourne market's expansion in the year ahead to be similar to its performance in the latest year.

A growth rate of 6.5 per cent would help lessen fears that sharply rising prices are adding to the housing affordability crisis.

But house price data can be volatile. Data providers use different statistical methods and samples to measure the market, which often leads to markedly different results.

While the Residex data points to slow growth in the June quarter, other evidence points to a pick-up in conditions in Melbourne.

Auction clearance rates have been above 80 per cent for all bar two weekends this year. The rate last weekend was 86 per cent, well above the 74 per cent clearance rate recorded at the same time a year ago.

And the part of the market where conditions appear strongest is in inner Melbourne where agents have been reporting strong interest and results at auction.

■ The Victorian Valuer General's price data for 2006, released on the weekend, showed the market grew at 6 per cent last year.

The data is far less timely than that released by the other providers, but it is regarded as accurate, because it is based on property sales documents.