Market Comment 5th October 2009
Thank you to all those who came to see us at the Home buyers Show in Melbourne over the weekend. Finally after so many months of indecision, there were almost no industry experts predicting a fall in property prices over the next 12 months. In fact almost all of the talks I listened to were talking about a dramatic increase in property prices throughout Melbourne.
We saw the results for the last weeks sales go back to over 1200 sales for the week, with the clearance rate on nearly 500 auctions remaining over 80%. Over the next 9 to 10 weeks there will be a frenzy of activity. We should see plenty of new stock, but with vastly greater numbers of purchasers the key strategy to success will continue to be “Pay a fair price for a good property not a good price for a fair property”
Many of the experts talking over the weekend were assuming rates would rise but slowly. We are still coming out of a slowing economy and although Australia did substantially better than every other country in the world, our economic growth is still slow and will take time to get back to normal. Our trading partners are also dealing with their own economic issues. And although the property market may seem over heated the Reserve Bank has many other factors to think about before pushing rates up substantially. Any rate increase would be extremely detrimental to our unemployment rate. And whilst this has remained in an excellent position, it is still poised delicately on a razor’s edge. Any slow down in domestic spending will adversely affect unemployment.
To all those who attended my talk over the weekend on negotiation, my notes are available as a PDF. We are sending them out to all those that left their email address with us at the stand, but if you weren’t able to you can send us an email at [email protected] and request the notes.
Ian James
