Property market update
Our clients love a property market update and this is our first for 2018.
There’s lots happening at the moment with several “Super Saturdays”just past for auctions conducted in Melbourne.
On the weekend of the 24th/25th of March 2018 according to the REIV there were 1476 auctions held and the clearance rate was 67%, last weekend the 17th/18th of March 1,514 auctions were held and there was a 68% clearance rate. This time last year 1,428 auctions were held and a staggering 81% clearance rate was achieved in 2017.
It can be very confusing for buyers as realestate.com.au reported different information saying that there 1776 auction results reported in Melbourne with a clearance rate of 67%. Domain.com.au reported 1715 auctions with a 65% clearance rate. Regardless of the different numbers of auctions reported or held, we can see that the clearance rates however now at the 65% range and nowhere near the 81% achieved same time last year.
What does this tell us about the market? Are vendors trying to achieve higher prices than were achieved in 2017 and is the market saying “no”? Or are buyers more cautious and holding back at auctions.
Last weekend I attended two, very soggy auctions when the heavens opened mid-morning in Melbourne. One was in Ringwood.
Melbourne auction
The property was quoted at $500,000 to $550,000 and it sold for $563,000. Some very unhappy first home buyers missed out. The selling agent told me that the buyer was a parent, bidding for her son who was based overseas and had been trying to buy for 6 months. They also told me that the son’s budget was less than the purchase price but the parent had contributed additional funds to secure the property.
What factors are currently affecting the market? The banks have really toughened up on their lending criteria. If you are self employed and earning your income in a foreign currency, forget borrowing from the “Big 4” and seek funding elsewhere. In fact, if you are living overseas and earning in a foreign currency it is increasingly difficult to secure a loan to buy property.
I believe that at any auction, there will be people interested in the property but due to lack of confidence in funding the purchase, they will not commit to an unconditional purchase.
New underquoting legislation introduced in May 2017 means buyers now have available to the the Statement of Information displayed at all residential open for inspections and on all online advertising. Is this affecting the market. I would say no as buyers may be prepared to pay more for a property than is listed on the comparable sales and more than the quoted price range.
Value is determined by the buyers willing to buy a particular property at a particular time.
I believe that if you are diligent and opportunistic, there is some great buying to be had at the moment. At Buyer Solutions, regardless of prevailing market conditions, there are certain properties we buy and certain properties we don’t. This is very strategic and takes time, but it pays off.
If you want an update on buying in a certain location or advice on all matters real estate, don’t hesitate to get in touch at jspencer @buyersolutions.com.au
Buying property, Home buying, Housing Affordability, Housing Market, Investment property
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