Quarterly Property Market Update – May 2014

Based on Reported Auction Results*

Autumn Sales – Solid With Steady Trend

Sometimes you need to filter what you read. No new revelation there. Much that is written is based on short “grabs” or quotes and the reader will then make a judgement. How well informed will the reader be? How easy is it to get the true picture of a real estate market?

Anyone who has worked in the real estate industry knows that one property sale does not “make a market”… nor do two or three for that matter (…though if the sales are in one suburb, this can be an indication of something). Brief commentaries with an exciting result in one location and another in a distant location, have the ability to give one the impression there are big results happening everywhere .. Hey presto the market’s on fire(!) … Not so.

Every weekend, we see anything from 600 to 1200 auctions in Melbourne. And these represent probably only about a quarter of all the sales which take place (auctions always get high publicity but are by far the minority when compared to private sales). When seen in this context, how do the several “big” results look now, as a means of getting a handle on things? Not very impressive, nor reliable.

To level things up, for a long time we at Renowden Buyers Advocates have used the overall auction success rate to smooth out all the “noise”. It’s a “blunt instrument” to be sure, but when it comes to exacting measurements in the property market on a day to day basis, there aren’t any! … Even auction reporting numbers are difficult to track with precision. Nonetheless, given this success rate takes in a broad number of properties from across the entire city and the “inconsistencies” with reporting numbers are at least “consistent” inconsistencies(!!), the reader can derive a solid impression.

This last quarter has continued to be solid with good volume and a success rate hovering consistently around 70%. This is indicative of gradually rising prices – borne out by the major sources of real estate statistics. On a weekly basis, we like them for their trend showing behaviour. As per our usual “caveat”, we see the market continuing in this fashion into the near and medium term, barring the occurrence of a left field event to dramatically change sentiment.

Contact us if you would like to discuss areas where you may be thinking of purchasing.