Quarterly Property Market Update – March 2012

Based on The Age Sunday Results*

Market Opens Slightly Stronger In 2012

You wouldn’t exactly be popping champagne corks, but 2012 has opened seeing several weeks of auction success rates back up over 60%. A few years back a success rate for a Saturday under 80% was unusual; today a figure that high that would be downright freakish! How attitudes and expectations can change… The heady recent years are unlikely gone for good, but for now we shall have to content ourselves with words like “average” and “mediocre” for our general appraisal of market conditions.

Last year was a washout year following strong gains over many years in property values, and a world economic scene that did little to inspire much confidence. This year, in our view, we are not expecting any runaway in property prices either. We would expect a meander of sorts – with an occasional exceptional outcome here and there (both high and low), but largely with more predictable results. Some selling agents are already commenting that it’s the “good stuff” that’s selling and the poorer presented or located properties are difficult to find a buyer for. This difficulty in finding a buyer also results from putting too high an asking price on a private sale.

Having said all of the above, mortgage rates are back down to very low levels historically. Should any confidence return to the world scene and Australia continues to be the lucky country, a healthy and regular success rate in the 60’s would not be at all surprising. This in many respects is the ideal place for the market to be – balanced. As anticipated, the buying side of the market is becoming more fickle with what it buys and how much it pays, and sellers will need to be aware that they alone, are no longer just calling the shots.

Bruce Renowden