Demand High, then low

[Propertunity]

Quote:
Originally Posted by Sharpstone888 View Post
So the important factors really for market sentiment would be auction clearance rates, right?

No. Another twisted stat. The r/e industry quote clearance rates, but include the sales after auction.
This means there was bugger-all interest at the auction, and the Vendor had to sell afterwards - sometimes several weeks afterwards - at a discount to get a sale. But the result still gets recorded as a successful auction.

Mmmm, I don't agree entirely. Sometimes the auction campaign generates interest which culminates in a sale after the actual auction day. Yes, sometimes they sell for less - but sometimes more too. I attended a mortgagee sale recently that attracted no bids. Went on the market same day for $350K and sold 2 weeks later for $360K ( 3 interested parties)

Then, look at how many were actually auctioned as compared to say the same time last year.
Currently, the total auction numbers are down - total sales are down across the board and stock is down across the board currently, and the rate of actual "on the day" sales is down.

You also need to take into account that auctions work well in certain times (more buyers than sellers), certain suburbs and certain states for that matter. Clearly we are in a buyers market at present and that generally means less sales by auction unless the property is unique or in a suburb where most sales are auctions because that is the expectation.

 

[Perp]

You also need to take into account that auctions work well in certain times (more buyers than sellers), certain suburbs and certain states for that matter. Clearly we are in a buyers market at present and that generally means less sales by auction unless the property is unique or in a suburb where most sales are auctions because that is the expectation.

I certainly agree with that; I don't know how agents are convincing anybody to think an auction is a good way to sell in the current market, but that's another story...

I wouldn't get too focused on any one statistic, Sharpstone. I think you're trying to treat this as a science when it's an art. Yes, there are clues to market sentiment, but it's all very subjective, and you're better served to get to know the fundamentals (proximity to transport, demographics, what people want in a house, parking, population, jobs, etc), and develop confidence in your ability to read all of these together, and how well a particular property stacks up on these measures, than to get too caught up on market-wide numbers.

The only thing that matters is the deal that you can negotiate, on a property which you believe ticks all the boxes. You may get a better deal now from a motivated vendor, than you'd get in a year (even if the overall market is weaker at that time) from a vendor who's kidding themselves that the market isn't down.

Put another way: spend less time focused on "the market", and more time focused on the merits of the one property that you want to buy. You don't buy "the market"; you buy an individual property.

 

[Sharpstone888]

there are clues to market sentiment, but it's all very subjective, and you're better served to get to know the fundamentals (proximity to transport, demographics, what people want in a house, parking, population, jobs, etc), and develop confidence in your ability to read all of these together, and how well a particular property stacks up on these measures, than to get too caught up on market-wide numbers.

Thanks guys. ozperp do you know where I can get more info on these fundamentals?

Chris

 

[skater]

Thanks guys. ozperp do you know where I can get more info on these fundamentals?

Chris

If Blacktown is the suburb of choice, then go there. Look at properties, talk to the agents, go to the auctions. In other words, do a little research. This is the only way to gage what is actually happening.

Enough said. The only way to judge the fundamentals is to GO THERE.

 

[Witzl]

Sorry to break the bubble. I saw one just the other day that sold for $230k from memory. Lalor Park.

Are you referring to the auctions that happen at Rooty Hill RSL on a monday night?

If so, then that would be the property my workmate bought
Was fire damaged ex-govt housing, and it is a good deal!! After repairs/renos it should easily be re-valued/refinanced for almost $300K.

Isnt for me though, as i dont have the extra cash to pour into renovations/repairs and im not confident enough with buying at auction. Its been a pretty stressful [learning] experience for him. I wouldnt want that experience right before xmas!

Well spotted though

 

[skater]

Are you referring to the auctions that happen at Rooty Hill RSL on a monday night?

If so, then that would be the property my workmate bought
Was fire damaged ex-govt housing, and it is a good deal!! After repairs/renos it should easily be re-valued/refinanced for almost $300K.

Isnt for me though, as i dont have the extra cash to pour into renovations/repairs and im not confident enough with buying at auction. Its been a pretty stressful [learning] experience for him. I wouldnt want that experience right before xmas!

Well spotted though

LOL! I didn't see that property, but a friend of mine did. She said that the damage was minor. There was another one that didn't get a bid. Had a vendor bid at $200k. I'm all out until I put the latest ones to bed or I would have been keen. Auctions are great, especially around Christmas.