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 "The property market tide is in ebb. The introduction of new taxes for NSW investors has added additional pressure to an already slowing Sydney property market." - Mark |
| Auction clearances still going soft |
| By Ian Gerard and Leisa Scott |
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May 10, 2004
IN the wake of the Reserve Bank's declaration that the housing bubble has burst, auction clearance rates fell in Melbourne at the weekend and made only a slight recovery in Sydney from 10-year lows. Sydney auction clearance rates recovered to 40 per cent from the previous weekend's dismal 35 per cent, while Melbourne clearance rates dropped to 55 per cent from 63 per cent the Saturday before. The Reserve Bank reported last week that national property prices fell by an average of 8.4 per cent in the first three months of 2004 and that growth in borrowing had eased. In its quarterly statement on monetary policy, the bank said falling property prices reduced the likelihood of any further rise in interest rates any time soon. Federal Treasurer Peter Costello yesterday admitted the softening housing market, coupled with rising petrol prices and rising interest rates around the world, could slow the economy. "I wouldn't call it a collapse but I'd call it a downturn that instead of rising as we've seen over the last 10 years or more, prices are going to stabilise," he told the Nine Network. Sydney real estate agents contacted by The Australian yesterday said the market was now at the beginning of a new cycle after years of booming prices, and many buyers were taking their time in such an uncertain environment. But some agents disagreed with the Reserve Bank. "I haven't seen any bubble bursting," said Anthony Walls, from Max Walls International of Sydney. "There are still a lot of buyers now. I just think prices have come back to a much more sensible range." Property prices in Sydney fell by more than 10.5 per cent in the March quarter. Mr Walls said baby-boomers looking for lifestyle changes were driving much of the current market, snapping up properties on the coast or in country areas. Melbourne house prices dropped by 14.5 per cent in the first three months of this year, but Collins Sims real estate managing director Bruce Bell said he doubted average prices would drop further. "I don't think there's been any bursting of the bubble, but it's come off a very high level after three years of buoyant pricing," he said. "The market has to settle, and it will be a year or two before it again gets some heat into it." Queensland real estate agents said the Brisbane market remained strong and was showing few signs of faltering. Real Estate Institute of Queensland research director Fiona Bergin said the state's property market was still attracting greater interest from NSW buyers following that Government's move to impose a 2.25 per cent stamp duty on the sale of investment properties. But Ms Bergin said those looking for a return to the "astronomical increases" of last year would be disappointed. Reference: The Australian 
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