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Race on as keen buyers chase too-few properties
Monday, January 18, 2010
Supply, or rather, a serious lack of it, is tipped to become one of the driving forces shaping the 2010 residential market.
There may be very little auction activity going on now but industry reports of strong levels of buyer inquiry and open-for-inspection numbers are already being received from across the metropolitan area.
It's not surprising, really, when you consider how 2009 ended. With a clearance rate above 80 per cent for December — the strongest it has ever been — a lot of prospective buyers who failed to get a property last year are still circulating in the market.
"They lost out last year, sometimes more than once, and they're keenly aware that they'll face more new competition this year and further price rises," said Catherine Cashmore of JPP Buyer Advocates.
"They don't disappear; they're still looking. Even average properties are attracting plenty of interest because there isn't enough available to meet demand."
RP Data reports that the number of properties advertised for sale in Melbourne in the month to January 10 was 30 per cent lower than for the same period in 2009.
About 1000 fewer properties came on the market each week in 2009 than in 2008, creating a supply drought at the same time that buyers began to surge back into the market because of government hand-outs, low interest rates and renewed confidence in the economy.
"We had a situation where there were more buyers out there looking for property but fewer properties being added to the market," said RP Data analyst Cameron Kusher.
"The low amount of stock available for sale and continued relative buoyancy of the residential property market should see real estate conditions continue to remain quite healthy."
That's great news for vendors but it means buyers can expect a tough time of it, likely to be forced to pay higher prices, assuming they are actually able to find a property.
REIV said 16 auctions were held around Victoria yesterday, the bulk of them in coastal and holiday areas.
In Torquay, three bidders pushed the price of 12 Rocklea Drive from an opening bid of $350,000 up to $432,500 before the action fizzled.
Barry Plant said the three-bedroom house, which was a mortgagee property, later sold on its pass-in price of $432,500.
Later negotiations also led to a sale, albeit below expectations, of 235 Punty Lane in Shoreham, a four-bedroom house situated on eight hectares.
Kay & Burton opened the auction with a vendor bid of $2 million, and two bidders put the price up to $2.2 million, where it passed in.
The property eventually sold for $2.35 million, despite the reserve being set at $2.5 million. In the first reported auction for the metropolitan area this year, a three-bedroom house at 8 Fenton Place in Narre Warren South sold for $324,000 thanks to three bidders.
Raine & Horne said the mortgagee auction opened on a genuine bid of $265,000. It declined to disclose the reserve.
There are more than 40 auctions scheduled for next weekend. The REIV median house and apartment price data for the December quarter will be released on Saturday.
- Chris Vedelago - News.com.au
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