OUTER Melbourne’s surging house prices are at risk of a correction, mirroring the boom-and-bust scenario that hit Sydney’s outlying suburbs between 2003 and 2005.
In Melbourne’s southeast, house prices in Cranbourne South rose 44.6 per cent to a median of $441,000 in the year to November, while in Narre Warren North, prices increased 23.8 per cent to $635,000.
“The higher you rise the harder you fall, potentially,” said BIS Shrapnel senior economist Jason Anderson.
The economic research firm still expects Melbourne’s overall residential prices to show the strongest growth of all capital cities this year at 8.2 per cent. This compares with forecast increases of 6.8 per cent in Sydney and 5.2 per cent in Brisbane.
In 2003, price surges of up to 30 per cent rippled through Sydney’s outer fringe only to crash 15-18 per cent in 2005.
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