Are Melbourne House Prices Going To Crash?

[BullionBaron]

I've been reading a lot on other forums and news articles about Aussie house prices.



So many people think houses are severely overvalued and due for a major crash. Nearly every day there's a report in the papers about auction clearance rates collapsing, rental vacancy rates going up, vendors being unable to sell etc etc etc.



The worst places seem to be Perth and Melbourne, with Sydney holding up a bit better.



Steve Keen was on the news last week talking about a crash of 40%. That would hit homeowners very hard and would be just as bad as the USA crash, and look at the mess they're in right now.



This has become a big talking point among my friends and family.



Are house prices going to crash like in the USA, UK, Ireland, Spain and other countries.



Or is Australia unique and able to maintain high house prices indefinitely?



I'd love to get the thoughts and ideas of other members here.



I'm renovating a home at the moment, but what I'm trying to figure out is should I sell or hold on when the reno is finished (should be done in two months). Maybe it's too late and prices will dive before I finish.



It's a bit of a worrying time to be perfectly honest.



BB.

[glen]

Well since there has been talk of a price crash for the last 4 years I find it is probably just all talk! <img src='http://www.melbournechat.org/public/style_emoticons/<#EMO_DIR#>/smile.gif' class='bbc_emoticon' alt='' />

[Sparkles]

In the 18 years that I have lived here, I have never seen prices drop significantly in any city. There have been times when things have been stagnant and of course we had the huge boom around 2003, but the market has showed steady growth.



But you only have to look at The Block to see an example of how the houses were purchased at a higher premium ($3.6m I believe) and were sold in a much less confident market.



My advice to you would be to finish your reno, and then hold onto the property if it is not going to give you much profit. Could you consider putting tenants in for a while?