Melbourne set for Perth-size downturn?

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A leading property researcher is warning that Melbourne could be in for a correction similar to that that Perth saw after the resources boom.

Residex CEO John Edwards believes that, due to an large surplus of properties, the outlook for Victoria "doesn't look good at all".

"There is a correction coming in Victoria, no doubt about it," said Edwards. "There will be a decrease in real values; the surplus in Victoria is  very large, and I can't see any economic reason that's going to change."

Edwards likened the situation to that seen in WA following the resources boom.

"We saw a correction in WA, and we're going to see a correction in Victoria at least equal to what we saw in WA," he commented.

Edwards tipped Sydney, Perth and Brisbane as the markets that are likely to show the most resilience in coming months; all other states, he warned, should be treated with 'extreme caution'.

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