Still a Buyer's Market - The Australian

15 September 08 Realestate,com,au

HTW says auction clearance rates are pushing up but the stock of houses auctioned each week is lower than in the previous 12 months and private sales are still more prevalent.

Vendors are lowering their expectations and some purchasers, particularly owner occupiers, are far more aggressive in searching for the perfect property.

"If a property on the market doesn't tick all the boxes they will simply continue looking," the HTW report says.

For first-home buyers the conditions are ripe to get into the market, it says. "Although rates are still high, this is offset by prices being lower than a year ago, and even lower than three months ago."

It cites a contemporary two-bedroom townhouse in the inner-city suburb of Brunswick.

Brunswick, 6km north of the CBD, had very strong capital growth in 2007 and was considered one of the surprise suburbs of the recent boom.

This townhouse sold in early April for $490,000 and resold in mid-June for $465,000.

"For a home buyer looking to establish themselves in a good inner suburb this would constitute a good buy." HTW says it is also a good time to look in the premium market, where the boom began earlier in mid-2006 and grew by up to 40 per cent over the following 18 months.

There have now been falls of up to an estimated 20 per cent.

However, it is this market where vendors often have very strong ideas about what their property is worth.

So depending on the vendor's financial situation, if a property passes in at auction it often gets taken off the market altogether because the vendor's price can't be met.

No doubt the real estate business, which has had a tough winter in Melbourne, is hoping the rate cut will stimulate interest in the spring selling season.

There are about 600 auctions scheduled this weekend in Melbourne.

However, the spring season often doesn't really get under way until October, after the AFL grand final.

Even so, it is unlikely to rival last year when, in the last weekend of October, 1245 properties were scheduled for auction.

The lower stock level is probably one factor working in favour of vendors in a market that by all accounts looks like it will continue to favour buyers for some time.

Majella Corrigan
The Australian

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