The weekend saw a return to the “70’s” for the auction clearance rates. Even though we are still seeing auction numbers in the 500’s (561 according to REIV) the clearance rate has strengthened. Throughout July we saw an average close to mid-500’s whilst last year saw an average of about 330. However, we need to look across the market and we can see that total sales are down substantially. Last year according to REIV there was an average of 1056 sales with a total of 4225. This year it has been 938 with a total of 3752.It will be interesting to see how the market will perform over the next 8 weeks.
We know the market is likely to pick up in October, but it is August and September that will either galvanise the discretionary vendors into action for the spring or see them sit on their hands until Christmas. This performance may well be the difference in another 5% rise in property prices before the end of the year or reversal of the tremendous growth we have seen in the past six months.
And it is the opposite of what you might think. If the clearance rates remain low, the media keeps reporting about the bubble bursting, and properties not selling; this will be the cause of discretionary sellers not putting their properties on the market. We already know that buyers are flooding into the market. Whether it be first time investors still confused with the stock market, home owners who have done very well over the past few years upgrading for their family home, or the down-sizer selling off the family home to move to a townhouse. Either way, we know the buyers are definitely out in force. If the market is quiet over the next eight weeks I would foresee a strong sellers’ market for spring. There will not be enough stock to satisfy the potential purchasers.
Over the weekend we saw quite a few properties sell well with one of the most unusual auctions I have been to of late. In Caulfield South yesterday in brilliant sunshine the Auctioneer of a villa unit decided to run the auction inside the house. People were crammed in the study, lounge room, kitchen and hallway trying to see what was going on. It was like trying to do an auction over the phone. There were three people bidding for the property and it sold at an acceptable price to the vendor. (It was declared on the market and sold two bids later). I thought this unusual as the auctioneer is an exceptional talent that usually whips the audience into a frenzy. He is quick witted and his auctions are usually fun. I thought yesterday’s was a relatively lacklustre affair that could have been better had it been held outside.
We have been overwhelmed by requests for my speaking notes on negotiating with Real Estate Agents, and also been asked when we are doing some more talks. We have just organised another three seminars over the next month, at Caulfield, Southbank and Williamstown where I will again speak on negotiation and also answer questions. These seminars are already filling fast so you must register by calling the office on 9523 1054 or email to [email protected]
Ian James
