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Interesting article in the Herald Sun stating the difference in clearence rates between now and last year, heres an extract:
On the last Saturday of major sales activity in 2007, 1132 properties went to auction, according to the Real Estate Institute of Victoria (SHS, December 15).
Last month, as the industry filed its final big weekend of sales results for 2008, 609 auctions were staged, more than 500 fewer.
Almost one in two properties taken to auction failed to sell under the hammer between last October 18 and December 13, excluding Melbourne Cup weekend when the clearance rate returned to 66 per cent.
Yet private sale numbers have barely shifted.
There were 639 private sales reported to the REIV in the week before Christmas 2008 — 683 private sales were reported in the same week in 2007.
Private sales represented about 52 per cent of all sales reported to the REIV between December 7 and December 13, 2008. A year earlier, private sales made up about 37 per cent of all property sales between December 9 and December 15.
Read the full article here:
http://www.news.com.au/heraldsun/story/0,21985,24924678-5013926,00.html
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VICTORIAN property values have plummeted about $40 billion in the past six months.
Melbourne’s median house price of $450,000 mid-2008 is now down to $427,500, according to estimates.
And house price expectations across Australia have sunk to an all-time low, a new report says.
Victoria’s $800 billion residential property market has dropped 5 per cent - or $40 billion - overall since July, according to BIS Shrapnel calculations prepared for the Herald Sun.
The trend has opened the door for potential borrowers desperate for cheaper housing.
Read the full article here:
http://www.news.com.au/heraldsun/story/0,21985,24881569-5013926,00.html
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HUNDREDS, if not thousands, of people at risk of homelessness will gather outside strangers’ front doors across Melbourne this month.
More people search for a rental property in January than in any other month, according to rental trends data to be released today by realestate.com.au.
Melbourne’s average rental rate has risen in recent years.
In October 2005, tenants paid $277 on average to rent a house and $258 for a unit, based on RP Data statistics.
By October last year, average rental rates had jumped to $361 for a house in Melbourne and $326 for a unit. That’s an increase of about 33 per cent in three years.
Caroline James from the Herald Sun has written an interesting article which can be viewed here: http://www.news.com.au/heraldsun/story/0,21985,24868648-5013926,00.html
Mark
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As prices in Sydney’s prestige suburbs spiral down, a question prevails: will 2009 be a bear year or have the prices dropped enough to prompt a bull run?
Australian Property Monitors economist Liam O’Hara is a "bear for the short-term", predicting further falls of up to 14 per cent in areas such as Bondi, Mosman and Palm Beach, which come on top of steep declines last year.
Preliminary figures from APM confirm the median house price in Palm Beach fell from $2,512,500 in the year to December 2007, to $2 million in December 2008 - a 20.4 per cent drop. Mosman dropped from a median of $1.2 million to $865,000 - a fall of 27.9 per cent.
The optimists and pessimists are locking horns over the Sydney housing market’s future, with bears forecasting more price falls and bulls arguing such doom and gloom will only depress the market further.
Even real-estate agents admit prices have declined steeply in premium suburbs.
Barrenjoey Properties principal Richard McDonagh says prices in wealth belt suburbs such as Palm Beach were off by 35 per cent in December as players in the financial markets were hit by the credit crunch, forcing them to sell holiday homes.
[W] estate agents principal Susan Lee says Mosman’s best homes had already fallen in price "at least 20 per cent" through last year. She says there will be more price slides for the top-end suburbs that rose strongly during the past four years.
"Sydney will have nominal price falls of 10 per cent but it will depend on where you live because some suburbs will have price increases - mostly those that are the cheapest relative to other stock."
Mr O’Hara says outer suburbs in the west and south-west - where prices are less than $360,000 - are poised for strong growth, especially property close to trains, schools and shops.
Rismark International head of research Matthew Hardman agrees, saying prices will rise and fall in different Sydney suburbs.
He says property in the city’s west and south-west is 25 per cent cheaper than it was four years ago.
"Those areas are now as affordable as they were back in 1998," he says.
Macquarie Group’s head of property research, Rod Cornish, forecasts "moderate price falls" across Sydney. He says the suburbs that will fare best through a tumultuous 2009 will be in the cheaper, city fringe areas.
One optimistic bull is CommSec chief economist Craig James, who says conditions are ripe for great home-buying opportunities in the year ahead. Lower house prices than in previous years, falling interest rates and lower petrol prices will boost home affordability, he says.
"We need people with confidence to act so we can get more momentum in the economy and I think this will happen soon," he says.
McGrath Real Estate chief executive John McGrath is confident about the health of the market, predicting bargains aplenty in suburbs such as Vaucluse, Hunters Hill, Longueville, Northwood, Northbridge, Cremorne, Mosman, Avalon, Whale Beach and Palm Beach.
"These areas count among the best in the country, so now is the time to buy in before the market surges back, which I suspect it will in these areas by 2010," Mr McGrath says.
Dr Hardman says now is the perfect time for cashed-up home owners with secure jobs to upgrade to a bigger, more expensive home because the discount is proportionately better in a falling market.
WHAT THE BULLS SAY
Real-Estate agents such as John McGrath, apartment developers Meriton and the head of NSW’s Real Estate Institute, Steve Martin, are happy to talk about their confidence in the market.
"In all my time in real estate, this is the perfect buying platform," Mr Martin says. "Interest rates are attractive, first home buyer grants are attractive and there is a stagnant market."
Mr McGrath admits that asking a real-estate agent whether it’s a good time to buy is "akin to asking your barber whether you need a haircut", but he says falling prices have made the market ripe for buying.
"With prices down by 10 to 20 per cent, interest rates falling by 2.5 to 3 per cent and rents up 10 to 15 per cent, an investment in residential property now makes so much better financial sense than it did a year ago when people were lining up at auctions each week."
Meriton sales director James Sialepis says the stockmarket turmoil and lower interest rates mean property investors will return.
"Astute investors are also aware that falling interest rates are having a negative effect on their bank term deposits and, with the sharemarket volatile, we expect investors to return to the property market and take advantage of the higher yields on offer."
What the bears say
University of Western Sydney Associate Professor Steve Keens caused a storm last year when he predicted house prices would fall by 40 per cent.
"Those sorts of predictions are just ludicrous because the Australian property market has floors under it and the drops won’t be that drastic," argues Rismark International head of research Matthew Hardman, who says there will definitely be price falls in some Sydney suburbs this year.
AMP Capital Investors chief economist Dr Shane Oliver says 40 per cent falls are unlikely, unless the economy hits a very deep recession or depression.
"But with the economy on track for a mild recession and, if not, then a very serious slowdown, house prices are likely to fall 10 to 15 per cent over the next year or so."
Australian Property Monitors Liam O’Hara forecasts house prices to fall by about 10 per cent.
SQM Research analyst Louis Christopher says people are not as keen to take on large mortgages - and the banks aren’t keen to give them out - which will wind back prices.
Macquarie Group’s head of property research, Rod Cornish, predicts moderate price falls throughout NSW.
Read the full article here:
http://www.domain.com.au/Public/Article.aspx?id=1231003892714&index=NationalIndex&headline=Bull%20or%20bear:%20what++39;s%20hot%20and%20what++39;s%20not%20in%202009
Mark