Melbourne properties hit half million average price tag

Homeowners will now pay more for homes in Melbourne than ever before as property values rise to near $500,000 average price.

As reported, Australian home prices are some of the highest in the world. Now, new homebuyers will need to fork out nearly half a million to get an average, moderately sized home there.

The Real Estate Institute of Victoria released shocking numbers showing that in the last three months in December 2007, the average selling price of homes rose to near $500,000. In that time frame, some 19,000 sales here took place.

The Melbourne property market is one of the highest priced in the world with the median price of homes sold here being $485,000. In December, the housing market soured up 12.8 per cent.

In comparison to December of 2006, home prices at that time saw a still high $391,000 median price. In the final year of that year, the housing market did see a 4.3 per cent increase.

In comparison to Sydney, Australia's usual top performing and most in demand property market, Melbourne has done tremendously well. Home values there are up 4.8 per cent, well below what is happening in Melbourne. In fact, the high home values in Sydney as well as Brisbane and Perth have contributed to Melbourne's increased housing market, simply due to property investors being unable to afford property in Sydney and seeking it out in Melbourne.

In particular is Victorian City which a huge 25 per cent increase in house values since 2006.

In terms of good or bad, this increase in value plays a role based on who you are. First time home buyers are facing a horrible time being able to afford such large home loans. Yet, home owners in Melbourne are happy to see their property values increase so much, so quickly.