[cjbillington]

Melbourne property prices actually haven't recovered from their 2022 peak, and that's before adjusting for inflation. I believe rents are down in real terms as well.

Things have been crazy for a long time, but I am actually optimistic for Melbourne specifically - the construction rate is up and the state government has been decreasing the power local governments have to block or delay development. If this continues, housing affordability should improve. My main concern is that a change of government may put an end to it, but I hope not.

Some details about what VIC is doing differently in this AFR article if you're interested (archive link because original is paywalled):

https://archive.md/yeDxF

[averageRoyalty]

Population growth rate in Victoria has been 1.9% YOY average for 20 years, with no sign of slowing down. Even if they hit their targets, demand will exceed supply.

The Victorian government has also failed significantly on public housing. The wait time is about 20 months (10 months is VicGov's target, it was 14 months 3 years ago) and they're currently looking to demolish many existing options without many short term optionsnfor residents.

It seems very unlikely to me that Victoria's house prices will drop in any sigificant way this decade.

[cjbillington]

I don't think there'll be any significant drop on a sub-decade timescale unless there's some kind of financial crisis, but the ideal kind of trend is prices stagnating or growing slower than wages, which is the case right now - and the question is whether it will continue.

I think there is a good chance it will, as long as a change of government doesn't deliberately dismantle the current approach. Yes there's population growth and yet prices have been stagnant or declining the past few years and construction has picked up. That's a good trend!

I'm not familiar with the situation with public housing but am happy to accept if the government has failed there. But this seems like a separate failure rather than an indictment of their approach to increasing supply generally which I think is working.