Quarterly Property Market Update – May 2011

Based on The Age Sunday Results*

Market Continues On A Steady Course

The auction success rate for the opening quarter of 2011 has continued right where it left off in the final quarter last year. We have probably seen a small drop in values of a couple of a percent overall in this period of six months, compared to the preceding six month period. A descent from the earlier higher auction success rates inevitably results in fewer “overruns” of vendor’s reserves resulting therefore in lower price outcomes. This price shift is likely to be a short term adjustment to this success rate change.

If the success rate remains where it is – that is, hovering between 60 and 65%, then this indicates that further price declines of any consequence will not be seen. From an overall market perspective this is a desirable place for it to be: buyers have the opportunity to be successful and sellers can still have the opportunity of achieving very satisfactory outcomes in their sales. Buyers advocates and selling agents are reporting precisely this situation currently with their respective anecdotes.

Renowden Buyers Advocates is of the belief the auction success rate will continue around these levels for the foreseeable future, barring major upheavals. A cautious, but long term confident view is a good approach. Over time, we have seen what real estate values have done. There is no reason to believe history will not continue to repeat itself…

Happy house-hunting in 2011,

Bruce Renowden