Auctions slump signals end of boom

[muzz22]

http://www.news.com.au/heraldsun/story/0,21985,23266297-661,00.html

Auctions slump signals end of boom

MELBOURNE'S rampaging property boom has finally cooled after years of soaring prices.

Auctions failed to fire yesterday and the Real Estate Institute of Victoria last night declared the market had peaked and prices were easing.

In the first big test for the market this year, some real estate agents reported clearance rates of less than 60 per cent.

The figures are well below last year's high-flying results, which consistently topped 80 per cent clearance.

Few buyers attended sales across the metropolitan area and those who did nervously sat on their hands.

Auctions in outlying suburbs were especially quiet.

Even "bargain" homes offered at foreclosure auctions failed to sell.

And many agents blamed the Reserve Bank's warning this week of a sustained wave of interest rate rises.

Despite the six consecutive interest rate rises in the past two years, the bank is still warning it must further rein in spending.

 

[pi2012]

So true.
Went to four auctions in the neighborhood out of which 3 were cancelled due to the lack of buyers. One was passed on at $531,000 as the reserve price wasn't reached.

 

[WallyB]

Good article Muzz

2008 should be an interesting ride with rates. The information now in the public domain regarding the reserve boards last couple of meetings shows the board wishes to make a statement. The last meeting/s tabled the possibility of a 50 point rather than 25 point rise.

It's almost like despite all these piddly rises of late, the death of a 1000 cuts hasn't reached the public consciousness yet ie no ones thinking twice before buying that all important 42'' plasma for the laundry, the shiny new coffee machine for the back deck or another IP. These latest market figures may be syptomatic the rises or at least the boards intent is starting to bite

The effect of rates rises on rents in particular may make the upcoming months interesting to watch

 

[buzzlightyear]

Been to six auctions over the past two weeks, crowds are still large, mixed bidding signals (some auctions prospective purchasers have been keen to bid others not), however the prices being paid are still very very solid, even though some have not sold on the day.

Don't believe the hype the papers report of the death of the inner suburb Melb property market.

 

[suburbangirl]

Well whoever was doing that front page article for the Sunday paper wasn't at the action I was at over the weekend - inner/middle ring Melbourne house quoted 350k plus, sold for close to 450k.

Those bidders sure as hell weren't "sitting nervously on their hands".

Hmmm...

 

[Lilli]

So is now the time to buying IP's?

Should we be holding off also, or should we be looking for bargains?

I have been looking for our 2nd IP but am unsure what more experienced IP buyers are doing?

Lilli

 

[Humphrey]

Well whoever was doing that front page article for the Sunday paper wasn't at the action I was at over the weekend - inner/middle ring Melbourne house quoted 350k plus, sold for close to 450k.

Those bidders sure as hell weren't "sitting nervously on their hands".

Hmmm...

Seems like a case of the papers making headlines so that they can sell more papers.

 

[willair]

http://www.news.com.au/heraldsun/story/0,21985,23266297-661,00.html

Auctions slump signals end of boom

The figures are well below last year's high-flying results, which consistently topped 80 per cent clearance.

Few buyers attended sales across the metropolitan area and those who did nervously sat on their hands.

Auctions in outlying suburbs were especially quiet.

Even "bargain" homes offered at foreclosure auctions failed to sell.

.

When you look that in QLD,over the past 4 weeks there is 38% more properties on the market then this time in 07,the auction listing numbers are also up in QLD,maybe with all the uncertainty with resi property prices and higher interest rates,and worsening global economic conditions,this could be the time to sell before prices start to stall, the clearance rates for properties in Brisbane is only 50 % and both the auctions we went to yesterday were both passed in..imho..
..willair..

 

[pi2012]

Its not only in papers...also news headlines in Tele...

 

[LynnH]

I've also noticed that there are an increasing number of newspaper ads which refer to "Mortgagee in possession", "Forced sale" etc - and have notice a number of properties being advertised at reduced prices. Several properties which have gone to auction in our local area over recent weeks have also been passed in. Interesting times ahead .....

Cheers
LynnH

 

[BayView]

Well whoever was doing that front page article for the Sunday paper wasn't at the action I was at over the weekend - inner/middle ring Melbourne house quoted 350k plus, sold for close to 450k.

Those bidders sure as hell weren't "sitting nervously on their hands".

Hmmm...

Standard r/e trick.

Advertise lower to get some interest and drum up some new contacts from the opens, while giving the agents some ammo to go to the Vendor to work on them for a price reduction.

The Vendor's reserve was probably about $430k, which makes the ads even more of a joke.

 

[jingo]

Been to six auctions over the past two weeks, crowds are still large, mixed bidding signals (some auctions prospective purchasers have been keen to bid others not), however the prices being paid are still very very solid, even though some have not sold on the day.

Don't believe the hype the papers report of the death of the inner suburb Melb property market.

I would agree with you buzzlightyear. Although there is more stock on the market meaning that buyers have more to choose from. I think buyers are being more selective, and not paying top prices for every single property.

However I find that this is an interesting first post for Muzz22. I wonder if he is a member of this cheery forum which is expecting the world to crash down any minute:

http://forum.globalhousepricecrash.com/index.php?showforum=9

 

[House_Keeper]

Auctions failed to fire yesterday and the Real Estate Institute of Victoria last night declared the market had peaked and prices were easing.

In the first big test for the market this year, some real estate agents reported clearance rates of less than 60 per cent.

The Real Estate Institute of Victoria usually talks up the market.

So when they start admitting that the market is slowing, it's not a good sign.

Cheers,

 

[House_Keeper]

I read in the paper that the auction clearance rate in Sydney over the last few weeks was 57%.

That's not a booming market. It will be interesting to see what happens after the next interest rate rise.

Cheers,

 

[muzz22]

No but thanks for the link Jingo. Interesting site. Unlike others, i like to keep my mind open to different opinions and ideas.

Over the last 6 months i have sold both my IP's and locked in some nice profits. Personally i believe the market is turning and its going to get very difficult for new investors to make money out of property.

Onto the next money maker.....

I would agree with you buzzlightyear. Although there is more stock on the market meaning that buyers have more to choose from. I think buyers are being more selective, and not paying top prices for every single property.

However I find that this is an interesting first post for Muzz22. I wonder if he is a member of this cheery forum which is expecting the world to crash down any minute:

http://forum.globalhousepricecrash.com/index.php?showforum=9

 

[jingo]

No but thanks for the link Jingo. Interesting site. Unlike others, i like to keep my mind open to different opinions and ideas.

Over the last 6 months i have sold both my IP's and locked in some nice profits. Personally i believe the market is turning and its going to get very difficult for new investors to make money out of property.

Onto the next money maker.....

In that case you will fit right in with the crowd on the site mentioned above. Many of them sold off real estate years ago, and watched prices continue to climb.

Time will tell I suppose.....

May I ask why you didn't just tap into your equity via a LOC and use this to invest in other areas?? Did you end up paying a lot of capital gains tax as a result of the sales??

 

[The_Bludger]

Well whoever was doing that front page article for the Sunday paper wasn't at the action I was at over the weekend - inner/middle ring Melbourne house quoted 350k plus, sold for close to 450k.

Those bidders sure as hell weren't "sitting nervously on their hands".

Hmmm...

Mate of mine sold his PPOR yesterday in Doncaster at auction. Quoted in the paper asking price $500-570K. Wanted $600K and both he and the agent knew that he'd easily get it, so definitely a ploy by agents to generate interest with the lower asking prices advertised in paper. Got sold for $615K.

 

[muzz22]

Both properties were acquired pre CGT as part of a deceased estate. Why didn't i use a LOC? I have no desire to pay my bank 8.5%. I'd much prefer they pay me

In that case you will fit right in with the crowd on the site mentioned above. Many of them sold off real estate years ago, and watched prices continue to climb.

Time will tell I suppose.....

May I ask why you didn't just tap into your equity via a LOC and use this to invest in other areas?? Did you end up paying a lot of capital gains tax as a result of the sales??

 

[sash]

Read the articles ......and read opportunity into it. As I have said there is another rate rise around the corner.....and with this uncertainty people with do stupid things like selling out of properties or cannot afford to keep them. This pattern always seems to repeat itself......

Am I the only one who sees a silver lining here? I think the bad news is going to get worse over the next 9-12 months.....this presents opportunities. As someone said wealth is the transfer of assets from the uninformed to informed!

Aren't newspapers wonderful! I am sure that Glenn Stephens of the RBA also has a smile on his face...they are doing his job.

I will be observing the circus on the sidelines......till it is time to buy in again of course....lol....lol!

 

[pieman]

Both properties were acquired pre CGT as part of a deceased estate. Why didn't i use a LOC? I have no desire to pay my bank 8.5%. I'd much prefer they pay me

yeah and in 7 yrs time you will be saying I cant believe I sold it for x dollars!!
pieman