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 "The property market tide is in ebb (or is it flow??). With so many opinions, who knows?." - Mark |
| Mixed results at housing auctions |
| By Natasha Robinson and Carmel Egan |
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June 7, 2004 AUCTION clearance rates in Sydney recovered at the weekend from a 15-year low, but the heady days of backyard bidding wars will have to wait until the next property boom. Melbourne's clearance rate dropped and Sydney's rose from 32.5% to 47% of houses on offer at auction sold, Australian Property Monitors figures show. The clearance rate in Melbourne fell to 52%, 10% down on the previous week's rate of 62%. But the figures for both cities were well down on the same period last year, when the rate hovered around 70%. At the height of the property boom in April 2003, auction clearance rates in Sydney hit 84%. Economists say sellers are now more realistic about the price they can expect to fetch. Housing Industry Association chief economist Simon Tennant said the cause of the fall in auction clearance rates was that more vendors were selling by private treaty rather than auction. Buyers were also taking advantage of cooling demand by taking longer to choose a property. "Homes are taking two to three months to sell, rather than two weeks," Mr Tennant said. Australian Bureau of Statistics figures for the March quarter showed a national housing price rise of 2.5%. Mr Tennant said he expected a slight drop in housing prices for the next quarter of less than 1%. He played down any suggestions of a sharp drop in the housing market. "It's all playing out just the way we want it – it doesn't mean we're heading for a train wreck." In Melbourne, Wakelin Property Advisory said although the overall clearance rate of 49% was 10% down on the previous week, quality properties – particularly Edwardian and Victorian stock – continued to do well. Property analysts acknowledged the Melbourne market was in the midst of a correction, with house prices considered to be overvalued by 30%. However, domestic building approvals continue to boom, with a 28% rise to $777 million for April 2004, compared with the previous April. Reserve Bank governor Ian Macfarlane told a House of Representatives committee last week the housing market would continue to cool and investors would be hard hit. Mr Macfarlane said it was too soon to know if the NSW Government had "gone too far" in introducing a 2.25% tax on the sale of investment properties, which came into effect last week. But it was too early to tell if the tax had triggered a migration of NSW property investors interstate. Reference: The Australian. 
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