Market Cooldown?

[r3ckless]

Hi Guys,

Havent been as active in the last couple months as the market was way too hot and I decided to sit on the sidelines.

Currently I'm in the process of having the last of my portfolio valued through the bank to extract all equity in preparation for the next few years to purchase property. Basically I'm setting up LOC's with LVR up to 90%.

In my field of work, I have access to RP DATA Pro which I rarely use, but was curious RE the clearance rates.

Two weekends ago, all states across Australia had 100% success, where Victoria/NSW were both at or around the 98% with the only one property being passed in, or sold prior.

Just had a look at last weekends figures and the numbers are incredibily low.

Just naming:

NSW - 69.5%
VIC - 61%
QLD - 37.5%

• Just a tough/unlucky week
• festive season
• investors realising prices are stupidly expensive
• home owners being too greedy

Thoughts?

 

[KangaBanga]

From what I am reading on this forum, some forum members have already mentioned they think the market has peaked for now and already started selling some of their props..

100% clearance? not sure if I've ever seen that before.

However it does seem like the selldown on the ASX stock market is starting to have an impact on property market. Usually there is a lag but significant drops in the ASX are usually followed by reduced sentiment in the property market as well.

 

[Freckle]

Auction clearance rates have always been dubious to say the least. Substantially manipulated by the industry given their significant earning power for RE agencies. Overstated in almost all occasions. The falls are almost always understated. The best you can hope for is to discern a trend albeit questionable on its own.

If you try and put all the little signals in context my gut feeling is that RE in AU may have moved towards bearish sentiment in general. If this plays out the way I think it will then you'll see increasing bearishness across all markets as confidence (in the economy in general) goes into a decline. Continued global contraction will reinforce negative sentiment.

The problem I see for RE is that in the wider context of global difficulties it will track sideways for the most part and if that persists for any length of time then negative sentiment becomes imbedded. That would inevitably lead to more sustained downward pressure on markets overall.

The real risk is that if GFC 2.0 hits during this time an already jittery market panics.

I see nothing in the next 1-2yrs that could turn things around on the global front.

 

[Redom]

Hi Guys,

Havent been as active in the last couple months as the market was way too hot and I decided to sit on the sidelines.

Currently I'm in the process of having the last of my portfolio valued through the bank to extract all equity in preparation for the next few years to purchase property. Basically I'm setting up LOC's with LVR up to 90%.

In my field of work, I have access to RP DATA Pro which I rarely use, but was curious RE the clearance rates.

Two weekends ago, all states across Australia had 100% success, where Victoria/NSW were both at or around the 98% with the only one property being passed in, or sold prior.

Just had a look at last weekends figures and the numbers are incredibily low.

Just naming:

NSW - 69.5%
VIC - 61%
QLD - 37.5%

• Just a tough/unlucky week
• festive season
• investors realising prices are stupidly expensive
• home owners being too greedy

Thoughts?

You're list is pretty good - can be some or combination of it all.

I'd just add that the supply tap is coming online fast now - so its likely to provide buyers more options.

I'm not too sure where you got the 100%/98% figures from - clearance rates havent been that high through this cycle (or ever) to my knowledge.

Cheers,
Redom

 

[see_change]

I'd just add that the supply tap is coming online fast now - so its likely to provide buyers more options
Cheers,
Redom

I can really only talk about the Sydney upper north shore. But the number of new properties coming on the market , dropped dramatically around six weeks prior to Christmas which correlates with the lead in time for an auction happening at Christmas ...

There has only been a trickle of properties since then , but there has been a continuing significant number of sales ( including ours , about to go unconditional . ) and the number of properties on the market is continuing to fall . Not down to pre spring levels but well down from the spring peak . I notice November figure for growth in Sydney were still at 1 % which is 12 % annualised which is still well above historical averages .

Certainly the economic headwinds are stronger at the moment , and while the general mood for the Sydney market is less rosey than a few months ago , it ain't dead yet . Feb / March will be interesting.

Cliff

 

[r3ckless]

figures from rp data. I'll send u the screenshot!

 

[Redom]

http://www.afr.com/p/national/income_recession_confirmed_as_gdp_ljjfkAYI94laDKTlEck4VJ

Income recession, fiscal recession.

Two quarters of negative nominal GDP growth.

 

[knightm]

... ( including ours , about to go unconditional . ) ...

Cliff

I look at a number of metrics regularly, auction clearance rates are IMHO the LEAST reliable of them (as others have mentioned).

If you want a better metric its probably the S_C BoS Metric (is Sea_Change Buying or Selling)