Property wars: sydney vs. Melbourne

when it comes to property in 2012 the result is Sydney one, Melbourne nil. Auction clearance rates, property prices and industry forecasts show Sydney’s residential real estate gathering pace while Melbourne is firmly placed as the country’s "most at-risk" market.

Last weekend, Sydney enjoyed its best auction result since the start of the year with 58 per cent of the 448 properties on the market sold. In Melbourne - which usually enjoys a higher clearance rate than the harbour city - just 56 per cent of auctioned homes sold, down from 65 per cent on the equivalent weekend last year.

Project manager for BIS Shrapnel Angie Zigomanis said Victoria had been harder hit by economic uncertainty and Melbourne homebuyers were struggling with affordability after a boom before the GFC.

“Sydney may have more expensive property but in Melbourne people are spending a higher proportion of their income on mortgages,” Mr Zigomanis said. On the supply side, a saturated real estate market pushed Melbourne house values down 6 per cent last year - only Brisbane is worse off, down 7.5 per cent.

“Last year 60,00 dwelling constructions were commenced in Victoria while BIS Shrapnel estimated that there was only a requirement for about 47,000, so there was well above what was needed,” Mr Zigomanis said.

Source: Courier Mail