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Government aid, rate cuts cushion Melbourne properties

5/02/2009

Melbourne property prices fell more slowly than expected in the December quarter, thanks to lower rates and the First Home Owner Grant boost.

The latest data from the Real Estate Institute of Victoria (REIV) showed the median house price falling by 0.9% to $426,000, while units dropped 1.1% to $365,000 in median price.

REIV CEO Enzo Raimondo said the impact of the current economic conditions has had a softer effect on prices than expected over the December quarter period. "The interest rate reductions late last year, together with the First Home Owner [Grant] incentives have helped to soften the effect on prices," he said.

Cheaper properties were the better performer, falling only by about 3%, compared to the 12% drop in the higher price brackets.

Raimondo noted that properties in the $500,000 and below price range in suburbs such as Craigieburn, Deer Park, Ferntree Gully, Boronia, St Albans and Thomastown have defied the downtrend.

In contrast, he said, big drops in the median occurred at the higher end of the market last quarter, in suburbs which had seen considerable price growth during the 2007 calendar year. This includes prime suburbs such as Brighton, seeing a median house price drop by 4.7%, Camberwell, falling by 8.2%, and Kew, recording a whopping 12% fall in median prices.

Demand for more affordable property has also helped property values in some regional areas, such as Bendigo and Geelong.

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