House prices surge in Melbourne

House prices in Melbourne’s outer suburbs rose dramatically last year and will continue to increase this year, it has been claimed.

In Melbourne’s southeast, at Cranbourne South, house prices rose 44.6 per cent to a median of $441,000 in the year to November. In Narre Warren North, meanwhile, prices climbed 23.8 per cent to $635,000, the Australian reported.

BIS Shrapnel senior economist Jason Anderson told the newspaper that Melbourne will continue to see the strongest price rises of all the capital cities this year at 8.2 per cent, compared to predicted increases of 6.8 per cent in Sydney and 5.2 per cent in Brisbane.

Rising house prices may affect the decision of Australians who decide to compare home loans in search of the best deals. This week, research by the Reserve Bank of Australia revealed that total housing debt hit $910.1 billion in December last year – a rise of 92 per cent on December 2004.

Mr Anderson noted that the Melbourne price boom has partly been driven by first home buyers. Victorians received the biggest first home state bonuses, which will remain in place until the end of June.

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