Rising House Prices

Within the last few decades in particular, House prices in Australia and the world have increased, largely due to inflation and population growth. Melbourne’s median house price has soared to $843,674 in march compared to $811,674 in the previous quarter; a large increase in such a shot given time period. Prices have risen every quarter for almost 5 years. The average price of houses in Melbourne has risen by more than $110,000 from March last year, and median house prices have more than doubled in a decade ;In 2007, the median house price was $386,411), the key driver to these changes is Melbourne’s population boom, and even though rising house prices is a win for homeowners, not everyone selling their property is feeling rich, as the problem is when your house value goes up, the costs of everything else also increase alongside it. This effect can have problems, where homeowners who’s property value has increased feel a false sense of optimism and wealth, known as the “Wealth effect”home-prices.jpg

For example, a Mrs Sallows, who believed that the market was booming, decided to sell her house for 1.7 million dollars; Soon after selling her house, she wasn’t even sure if she could even afford another house in the same area, this is a real life example of the “Wealth Effect” Rising house prices have been a big issue in recent years.

How do you think this can be resolved?



Resources: https://www.domain.com.au/news/melbournes-median-house-price-soars-to-843674-in-march-quarter-domain-group-20170419-gvn64k/



  1. The government can establish housing policy if people after selling their houses and at that time that consumer required some evidences to proof in his assets no more house property. And he wants to purchase another new house the government can reduce their housing tax. That means the government can allow them to pay less to purchase this house. I think it’s should be a solution to solve people can afford purchase another house in the same area.

    Liked by 1 person

    1. Hasnt there already been restrictions on foreign ownerships? Especially those from China.

      Also I heard that some land in Box Hill South was sold for around $3 million – which will probably drag prices up higher for properties in the area 😦

      Liked by 1 person

    2. At best, it would just slow down the rate of price growth in the short term. Simply put, only a foolish homeowner would be willing to sell their house for less than they purchased it for. Although, it wouldn’t be incorrect to believe that price drops could occur over time when demand plummets and homeowners are desperate to sell.

      Liked by 1 person

  2. After hearing much about this issue over the past 6 months, I’m beginning to believe that the issue needs to be tackled from both sides. The use of houses as investments, particularly by foreign owners, is an issue, and one that needs to be addressed on a state and federal level by changing laws regarding tax-write offs such as negative gearing and regulations on foreign ownership and occupation. However, there is a belief amongst those seeking to purchase houses that they should be able to purchase a nice house, with spaces for 2 cars and a backyard, all in a fashionable suburb at a reasonable price, a belief clearly far removed from reality. Young homeowners have always had to buy houses in the outer suburbs (when my grandparents bought in Doncaster in 1963 they were the 3rd house in their new street) because that was where it was affordable, and eager homebuyers don’t seem to realise that today’s doncaster is often 40 km away from the CBD or more. House prices should and must come down, but expectations about the type of city we live in must change to meet them.

    Liked by 1 person

  3. Until they change taxation law in this country people will negative gear and buy investment properties till their eyes fall out. I think the only thing for people to do is come to terms that apartments are the new house and that’s all people are going to afford in the more pricey areas.


  4. In the US, only citizens can own property, if similar rules were done here, I think it could work as more houses for actual people of this country.


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