October 2010
Quarterly Property Market Update – October 2010Based on The Age Sunday Results*
Auction Successes Stage A Modest RecoveryFollowing a mid-year drop in the weekly auction success rate to the 60’s per cent area from consistently over 80% at the start of the year, success rates have nudged back into a mid-way range hovering between 70 and 76% in the month of September. Anecdotally the word from selling agents across Melbourne’s inner belt (within 10-15 kms of the CBD) is that auctions can still be patchy, and the days of assuming “everything” will sell – “no worries”, are past. Our own observations around the auction scene would largely agree with this overview. Buyer’s demand pressure is not the frantic behaviour it was. Though still something of a rarity, from a buyer’s advocate’s perspective, it’s a delight to participate in a pass-in where you are the only bidder!
In spite of slightly cooler conditions overall, we have seen some solid buying pressure across the price ranges we specialize in which is from $400,000 to $1 million and in many instances four or five bidders have competed for properties. Our estimation of the health of the property market is that results consistently over 65% reflects a sound situation, with growth albeit modest, likely to be occurring. Once this rate is over 70% for any period, prices are likely to be pushing higher and demand from other bidders/buyers competing, more noticeable. While tactics always matter, they matter even more in this environment, because not only is price an issue, but not being able to secure the property in the first place is at risk.
Residential real estate sold by the auction method in Melbourne number roughly one in four or five of all properties sold. Whilst this therefore is not a complete picture by any means, it has always been a good guide as to general demand – particularly in the established suburban areas.
Happy house-hunting,
Bruce Renowden
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