Fall in Clearance Rates This Weekend ?



From: Anonymous

I was wondering if anyone else thought there would be a large fall in auction clearance rates this weekend following the US disaster & the demise of Ansett ?
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Reply: 1
From: See Change

Hi anon

We put our house up for sale last weekend with open houses on sat and Wed.

When I rang agent on Wed to find out what happened I expected her to say , "well given the circumstances we had a quiet day today "

This didn't happen . Our open day on wed was busy and after intensive negotiations we agreed to a price on wed night. The buyer was highly motivated to exchange and that happened last night ( thursday ) without the buyer getting pest and building inspections. They were very keen to have every thing finished prior to the weekend so we didn't another open house this weekend. The price was at the top end of realistic expectations and is a price I would have expected from a " highly motivated heart buyer".

It was my aim to go through to Auction however I was apprehensive given the events in USA and it was a price we were very happy to get.

Thinking through likely reactions , my thoughts are that most people who are about to buy ( in particular owner occupiers ) have already made a decision to buy and will go through with their purchases. I think it is unlikely the market will fall though the floor straight away , the same way the share market does when it crashes.

However I believe that, in retrospect,this event will be the event that will be seen as the trigger for a change in market sentiment and subsequently market direction. From my understanding market direction usually changes when some unexpected trigger happens in a situation when there is already some uncertainty.

Throughout much of the western world the property market is booming ( or so I've heard ) and this is apparently not being associated by a significant increase in business investment. The thing that is driving the property boom is consumer sentiment. The events in the USA will strike right at this.

We have already seen an increasing number of major corporate collapses over the last months. People are only just starting to come to think about the economic ramifications of the WTC tragedy as so far every one is concentrating ( justifiably so ) on the Human consequences of the tragedy.

When the US sharemarkets open I will not be surprised to see little or no reaction as there will be intense political pressure in the US on the markets not to sell down and to hold there nerve. Having said that the share market may also fall through the floor.

In the medium term I believe that the property market will soften over the next months but whether that continues in a longer term will depend on how the world reacts to the terror.

One concern I had about the longer term for the property market in OZ was the thought of a Labour government getting in. Most commentators seem to think this is less likely now.

See change
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Reply: 1.1
From: Anonymous

My house is next door to a vacant block where a duplex is proposed and my office (I work from home) over looks all the comings and goings.

There has been an increase in traffic ie. agents showing people over the block this last two days. OK, so this is an isolated example and more will be revealed tomorrow at the auctions.

Property is seen as a defensive holding in times of uncertainty, but it is not liquid. I anticipate a slowing of the market for a week or so whilst people figure out what it all means. If interest rates fall in the US, and the latest consensus is a fall of 0.75%, then we may see a 0.5% cut here. There is no doubt what that would mean.

Anyway I am off the point of your question, but isn't property a long term investment? So does one weekends figures matter? I suppose it does if your property is up for auction this week end :)

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Reply: 1.1.1
From: Kevin Forster

I think this won't change a real lot. The people who are want to buy will buy.

The gunna's and never wills now have another reason not to buy.

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