Who could blame first home buyers for beating a hasty retreat when it comes to today’s real estate markets?
Not only are they bombarded with overwhelming media commentary regarding our housing “affordability crisis” on a daily basis, there’s also conjecture about interest rates heading onwards and upwards and a general feeling of unease surrounding the collective global economy. I’d be panicking too…if I didn’t know better!
A recent Sydney Morning Herald article from Dr. Andrew Wilson – senior economist with Australian Property Monitors www.apm.com.au – revealed that activity in Melbourne’s housing market remains subdued of late, with the traditionally quiet winter selling season drawing even less buyers in than usual.
Strong house price growth prior to the recent market slowdown and a number of consecutive interest rate rises across 2010 are still having an impact on consumers, with weak auction clearance rates reported almost every weekend and longer than usual days on the market faced by vendors.
According to data from APM, it is taking an average of 79 days to move housing in recent times, compared with 50 days on the market a year ago, with vendors forced to discount their homes by an average of 6.6 per cent in May – the highest recorded since March 2009.
Not surprising really that with all of the negative media sentiment surrounding property at present, Victorian first home buyers have decided to postpone their dream of finally getting a foot on the first rung of the property ladder.
Over the first four months of 2011, only 7481 home loans were approved for first home buyers in the garden state; the lowest number recorded over the same period of the year since way back in 2004 and 48.5 per cent lower than the 14,529 first home buyer loans secured over the first four months of 2009.
Wilson predicts that this trend will continue throughout 2011 as buyers sit on the sidelines and wait to see what eventuates with the ongoing affordability debate and in which direction the Reserve Bank decides to take interest rates.
Of course this is good news for property investors with a long term outlook, as it means reduced competition in the price range the majority of investors traditionally look to buy in. And with vendors becoming increasingly flexible with their asking prices in order to sell, there are definitely good deals to be done.
The question is; will you have what it takes to look beyond the hype and join that group of savvy investors who will benefit from the opportunities our current housing market is presenting?
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