RESIDENTIAL PROPERTY UPDATE - August 2008

Based on The Age Sunday Auction Results *

May 4	477 795	= 60%	* Auctions Scheduled across Melbourne (Sold on the day or prior to Auction) A Guide to Success Rates: Over 70% : Market very buoyant - prices rising strongly 60% to 70%: Demand fair to good prices increasing. Below 60%: Fair at best - prices level or falling
May 11	372 593	= 64%
May 18	330 524	= 63%
May 25	350 547	= 64%
June 1	400 625	= 64%
June 8	116 190	= 61%
June 15	396 591	= 67%
June 22	331 534	= 62%
June 29	295 455	= 65%
July 6	254 386	= 66%
July 13	229 370	= 62%
July 20	292 404	= 63%
July 27	278 442	= 63%

'Normal' Market Conditions Prevailing

There has been a significant change in the property market. So far this year has seen a marked contrast to the recent heady years, where instead of multiple bidders at almost every auction, and private sales being clambered after by not one buyer but multiple interested parties, the pace is at last resembling a “normal” market. (Thank goodness do I hear you say?) To those who have only recently taken an interest in property matters, it may appear the market has collapsed or is in the process of doing so. Not so. Levelling out after many good years it certainly is, and with good reason, but buyer levels and activity generally are now only getting back to the ways things are most of the time. One buyer.... maybe two... or no buyer at all, is most common at auctions generally if you survey past decades.

With many auctions held across Melbourne every weekend, results will be written highlighting this spectacular runaway result or that inglorious flop. In reality, most sales are returning fairly predictable results (including “no” result i.e. passed-in, in many instances). Auctions with sale prices exceeding reserve by 20% and more as was often the case last year, are very rare indeed this year - as you would reasonably expect.

Buyers looking at purchasing now can do so with more confidence in the knowledge that the hype and frenetic behaviour is all but gone from the marketplace. And of course as we know with the history of property prices, at some future time, today’s price will always seem like “good buying”, irrespective of what your thoughts may be today.