Quarterly Property Market Update – August 2011

Based on The Age Sunday Results*

Market Drifts Last Quarter

An overall slight decline in values in Melbourne has continued over the last quarter. Auction success rates continually under 60 percent are a clear sign of this. Areas will have individual variations in these reductions, but safe to say there is a clear trend across the market and it is lower. According to most industry experts, 5 to 10% is the amount of decline since last year.

A stable mortgage rate – one that hovers around the current 7% level, would be a good outcome for the market we feel. The fear has been that interest rates would continue to rise. Combining this fear with other economic woes and the negative world news generally we are constantly immersed in (to the point of needing to take a regular Alka Selzer; perhaps better might be to turn the telly off earlier) have brought buyers to a point of some uncertainty in their decision making. In any event, they act with less bravado these days. By contrast, in more recent times the market has commenced talking the other direction for interest rates. If this turns out to be maintained and interest rates do hold steady for a period, or even decline, then buyers may well return with some added confidence. The herd, like the jury, is out on this one. If anyone knows for sure, please let me know.

Renowden Buyers Advocates will assist clients no matter what the market is doing. Quieter markets are often times when buyers do not use an advocate, feeling less of a need to be aided. True enough. However it is in the quieter market that advocates can sometimes be most useful – when selling agents are most “vulnerable” (don’t tell selling agents I said this!). This aspect is commonly not understood amongst many buyers who stand to gain the most in this type of situation.

Happy House Hunting,

Bruce Renowden