Quarterly Property Market Update – November 2011

Based on The Age Sunday Results*

Market Remains Sluggish For Sellers

If nothing else, the auction success rate has been remarkably consistent during the review period – barely fluctuating more than 5% from the best to the worst result for the quarter. Buyers are certainly out and about, but by and large bidding pressure at the “coal face” is nowhere near what it used to be… Markets such as the type we are currently experiencing, can occasionally produce some outstanding results for buyers. For example…

We recently represented a buyer at an auction where the property was passed in to us (there was one other bidder) … Following some tough negotiations, we managed to secure a purchase for our client at 10% below the rate notice valuation! The purchase price figure needless to say was also well below the vendor’s initial reserve. We are giving ourselves a pat on the back here (why not eh?) but the point is that that such results were almost unheard of over the vast majority of the last fifteen years. (…The “GFC” aftermath witnessed some very poor results, as we all know.)

Far from aiming to give buyers the false hope that such a result is likely at every auction – because it certainly isn’t, the purpose is more of general encouragement. Buyers who may have in recent years given up hope of ever being successful may find the time is better now than it has been for some years. Competition is not as fierce from other buyers. Also of assistance, is that agent’s “quote ranges” are  generally much closer to the mark, courtesy of the combination they are trying harder to be accurate, and auction outcomes are currently more predictable…. Many auctions are selling within the range or very close to the top end.

While on the subject of “quote ranges”, as a regular internet user I would like to make a professional … and “man in the street” comment, about the agents who quote an estimated price range, and those who “decline” to. A “helpful” agent will quote a range, and an “unhelpful” agent won’t. It’s as simple as that! It’s irritating when price guidelines are not provided, and the excuses/reasons offered by the offending agents when one is chasing up the information, are often even more irritating! … Thank you to the agents who’s aim is to assist buyers (and their advocates!) in this way.

It is our expectation the market will finish the year as it has been over the recent term.

As always… Happy House Hunting,

Bruce Renowden