The Real estate Institute of Victoria (REIV) believes that Melbourne’s residential property prices could double over the next 10 years according to REIV CEO Enzo Raimondo.

The prediction appears to be based on analysing the previous 10-year performance. Mr Rainmondo reported to have said that the trend over the last 10 years or more has been upwards and, when comparing the median price today, with what it was in 2000, he believes that prices “will probably double again” in 10 years to over $1 million.

The prediction may have validity, given the volatility of the share market and given that the real estate sector has been holding up well. This could be offering an entry point for first-home buyers and others to look at buying a property to relocate to, or as an investment.

Meanwhile there is a growing consensus that the residential property sector may be coming off from the bottom of a cycle which when considered in the light of events in Europe and the US which have also affected confidence in the Australian market. The view is that the economy is quite sound, our banking system good, and confidence will improve over time.

A series of rate cuts would enhance affordability, a possibility given events in Europe and the US.

Meanwhile banks which have seen declining mortgage applications are aggressively competing for market share with each other, offering deals on a variety of home and investment property loans including heavily discounted fixed term loans.