According to the Real Estate Institute of Australia, average house prices in Melbourne's outer suburbs and Geelong were $270,000-$285,000 in the latter part of 2006.
Some regional centres like Ballarat, at $211,000, were more affordable.
High house prices are part of a national tragedy.
In spite of the prosperity stemming from 13 years of solid growth, spiralling house prices are taking home ownership beyond the means of young people.
High home prices are due to state government controls.
It costs about $50,000 to prepare a block of land for housing and about $130,000 to put a house on it.
The value of a block of raw land is only a few thousand dollars but the government restricts the use of land for housing.
This creates scarcity and boosts housing costs in outer suburbs by another $100,000.
It also creates knock-on price increases in urban areas.
In most parts of the US and in Germany, land controls are less stringent and house prices are at the $200,000 level.
Prime Minister John Howard and Treasurer Peter Costello have recognised the price boosting effect of stringent planning laws and have urged state governments to relax them.
Land-use controls on housing developments were first introduced in Australia by misguided planners.
Some thought we were running out of land, others wanted to re-create a dense European-type city.
Many claimed that it would be cheaper to supply a denser population with sewerage and other services. In fact, we cannot be said to be running out of land when less than half a per cent of Victoria is urbanised.
Even with the most optimistic population increases conceivable, this figure would never reach 1 per cent.
Nor is it cheaper to service city land than it is to service outer suburban developments.
But dismantling the planning laws is proving difficult.
For a start the "don't-build-anything-anywhere" brigade actively oppose development and conjure up the spectre of "urban sprawl". Then there are firms that have a financial exposure to land development.
More building blocks being made available will undermine the value of blocks that are already approved.
Some of these firms are highly influential. Macquarie Bank, for example, has undertaken research which claims to prove the increase in housing costs is due only to high demand.
Gullible journalists have reported this research without questioning why price inflation is not happening in places where the supply of land has been increased.
While land-development controls boost the wealth of those with houses, by pricing younger Australians out of home ownership the controls threaten to create a two-class nation.
In addition, they mean bigger mortgages and higher living costs for those who can afford to buy.
Hopefully state ministers will heed the calls of their federal counterparts and remove the controls on housing development.
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