In the 3 months to June 2006 the Median House price rose and impressive 5%, while apartments rose 2.9% (Source Real Estate Institute of Australia), not bad for just one quarter.
The housing price growth was second only to Perth which is nearing the peak of an exceptional growth phase, so that was expected to top the list.
However Melbourne has been drastically underestimated, the strong migration inflows, steady State economy and shortage of property caused by many projects not being commenced as a result of the recent slow down have all combined to make this a good investment climate.
Melbourne has been recognized as the World’s Most Livable City twice, and this ultimately reflects well on the property market as people seek to experience the lifestyle advantages of such a wonderful city.
The recent Commonwealth Games brought valuable exposure, and the annual horse race “The Melbourne Cup” has now hit international iconic proportions. No wonder it is called “The race that stops a nation”.
For those that have been putting off buying in Melbourne, waiting for a bargain, you might be disappointed and it may be time to start looking before prices push too much further. 
There is an acute shortage of premium property, and this is a major influencing factor pushing the market up generally.
The inner city market remains popular and it is still possible to find some great value, while the strength seems to lie in the city fringe and coastal strips.
Emerging suburbs are also starting to gain investor confidence, with entry prices starting around the A$300,000, which means that you can secure your investment property in Melbourne with as little as A$60,000 contribution.
