mark wool

I think you are right. I dont forsee a huge crash just people more reluctant to pay over the odds. I think house prices have already begun to drop if only by insignificant amounts. I reckon towards the end of 2011 you will be able to notice a drop of around 10%. It only matters if you are selling, and dont have the equity in the property.

paulry

Or if you are buying and struggling to afford/justify an inflated price

freebo

Of course if prices do fall they'll probably bump up the 1st time owners grant (which should be called the "protect the property market grant").

ABCDiamond

It was effectively eventually called the "property builders grant" to keep the building trade going.

However, the original purpose was to rebate the GST being included in new property prices.

man_called_Horse

Bump it up by how much to be of any impact?

On a $500,000 property you now need a $100,000 deposit otherwise the bank wont touch you.

You would think that this unavailability would drive down prices of the first time affordable areas... but there are plenty of people especially in Sydney are willing to buy as investments and rent them out to the same people who couldn't afford to buy them in the first place.

I'm not saying that every property you are going to buy in Sydney is going to be immune from price drop... but there are areas that you cant fail to go wrong. Location and Value is the Key.

freebo

Looks like it may be slowing down from this (Sydney Auction clearence rates, http://www.homepriceguide.com.au/...



And one RE agent here recons the Sydney property market has "died in the arse" - http://www.smh.com.au/business/prope...0521-w1ts.html

ABCDiamond

Interesting to see where the British population in Sydney is higher (population % wise) ...

man_called_Horse

Yeah I would have guessed that.

ABCDiamond

The number of Auction sales in some areas has dropped considerably.

The outer western Sydney suburbs in my chart above had only 3 auction sales out of the 37 last sales shown.
And from the inner Sydney suburbs, out of 15 sales, only 1 was sold at Auction.

Therefore, if we took an average of those two regions, the auction clearance rate is only based on about 10% of all sales.

Does this mean that people are being more careful at auctions, and not getting carried away ?

ozzieeagle

Looks like a window of opportunity for those willing to change up.

I reckon this would have been 800k last November.... State Trustees auction now... which I think means it has to be sold.

I wonder if it will go for less than 650K with not so many buyers around.

Hmmmm

http://www.realestate.com.au/propert...orth-106646872

This would save me a hell of a lot of building headaches.... I may pop along

freebo

Even bigger window in Melbourne...

ABCDiamond

An interesting comparison suburb, that one is in Coburg North, Victoria, and every recent sale recorded by the same source as my others was at auction in that suburb. With a 71% Auction clearance rate.

pomtastic

Auction clearance rates are dodgy, half of them don't even get reported as it doesn't do the REA any favours if he hasn't managed to auction a home - bad publicity. The clearance rates are calculated from reported auctions, unreported are ignored and not included in the clearance rate.

Also, if the house sale is negotiated after the actual auction at a lower price because of lack of interest on the day, then this gets reported as an auction sale, when in fact, it wasn't but makes the sell stats look good.

That's what Real Estate is all about here, confidence, spin, smoke and mirrors.

pomtastic

oooooppps, double post!!

man_called_Horse

Auction clearance rates (ACRs) are one of the more widely reported property statistics. In the 2009 financial year, auctions accounted for 11% of all house sales in Sydney and 17% of all house sales in Melbourne. For units, the proportion is lower, with auctions accounting for 6% of all unit sales in Sydney and 14% of all sales in Melbourne. Canberra is the only other capital city where auctions accounted for more than 5% of all property sales.

If sales by auction only represent around between 10%-20% of all property transactions, why are we so interested in not only the auction clearance rates, but also volumes and value of those properties sold at auction. The short answer is that the majority of auction sales results are available on the same day the auction is held, in a much shorter timeframe than private treaty sales take to report, and provide a current view of how the market is performing.

On a typical Saturday in Sydney, real estate agents will report over 70% of all auction results to APM. This proportion is lower for Melbourne, but rising. Auctions are held nearly exclusively on Saturdays, meaning that the results collection process can be undertaken largely on a single day without taking too much time out of agents’ schedules. Private treaty sales results, although collected for the Saturday, are also spread out throughout the week. Consequently, private treaty sales are collected with a much longer time delay from both agents and the Valuer Generals Office

So by Saturday evening, preliminary auction clearance rates available for publication in Sunday’s paper. Of course, this is of no use to anyone if they’re inaccurate or if they don’t tell us something important about how the property market as a whole is behaving (i.e. including private treaty sales).

APM’s analysis of our historically reported Sydney auction clearance rate shows that between the time auction sales are reported on Saturday evening, and after the full sample is collected by midweek, the ACR changes by less than 2% on average. So, the preliminary numbers are robust and accurate.

But what do they tell us? The chart above tells us that historically, auction clearance rates (which we know nearly immediately) have had an extraordinarily strong relationship with current house price changes (which we won't know for at least a month). During the periods when Sydney experienced quarterly house price growth close to or above the 4.0% mark (mid-1997, late-1999, 2001 to late-2003, and the last 6 months), auction clearance rates were typically in the high 60%s and low 70%s. Between 2004 and early-2007, when Sydney house prices were flat or falling, clearance rates were between 40% and 50%. Not only that, any drop in auction clearance rates nearly always coincided with a drop in the rate of house price growth. The relationship is very similar for Melbourne.

So even given all the difficulties in collecting timely and accurate auction data, the reported weekly auction clearance rates are an accurate and reliable property indicator that provide a very timely snapshot of how property prices are performing right now.

Source http://www.smh.com.au/business/prope...0310-pz0m.html