With more and more properties flooding the market at present and buyers sitting on their hands waiting to see what the New Year brings in terms of interest rates and the overall health of Australia’s economy, experts are predicting a slow down in the housing sector over the festive season.
It’s expected that many sellers will withdraw their homes from the growing pool of properties for sale, with discouraging auction results and a glut of competition forcing them to rethink their selling strategies.
According to a report from Smart Company, figures from Australian Property Monitors showed a recent decline in Sydney’s clearance rate to under 50% and the number of Melbourne properties up for sale is consistently exceeding 1000.
Real Estate Institute of Australia president David Airey, says the disappointing Spring selling season will force many sellers to rethink their position as they are unable to obtain the price they hope for on their home.
“There is no question that if their houses haven’t sold, and if they can’t afford to keep them, they’re more than likely going to give it perhaps another weekend and then think about taking it off the market,” he says.
“Then what will happen is that we’ll see these sellers putting them fresh on the market in January or February after this two or three week hiatus. Then what we’re going to see is that sellers will reflect on how urgently they need to sell and what price they can realistically get.”
Part of the issue seems to be that sellers have not yet caught up with the latest cyclical slow down in capital growth and still expect to reap the benefits of the mini boom we experienced late last year and into the first half of this year. But the reality is, with a number of rate rises in recent times, buyers are becoming more cautious about jumping into the market feet first.
However Airey says that it’s not all doom and gloom, with the Melbourne market still showing positive signs and shaping up “pretty well”.
“I think we’re seeing a record number of properties going to auction every market in Melbourne, and to get a 60% clearance rate is still pretty good given there were 931 auctions. In Sydney it’s a little bit less exciting, but Melbourne is a resilient market.”
“We’re still seeing strong median prices in Melbourne, so it’s really a case of “when the music stops”. We’ll need to see what happens in the first couple of months of next year… I think we’re going to see more realistic prices being offered,” says Airey.
Chief Executive of the Real Estate Institute of Victoria Enzo Raimondo says that 2010, “will see the most auctions ever held in one year in Melbourne, surpassing the previous high in 1999.”
He adds that with many properties failing to sell, stock levels will no doubt be affected into 2011.
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