December 9, 2010
As more home owners place their properties on the market, many are diverting away from putting them under the hammer.
According to new research from RP Data, there has been an increase in the number of properties for sale through professional listings during the second week of November. The market activity index was higher than 130, which is more than double that of January this year (below 60) and more than triple that of January 2009 figures (just above 40).
The data also showed the number of newly advertised properties for sale in Australia over the month ending November 14, has risen sharply and is up 26 percent from the same time last year, from 50,183 last year to 63,087 this year.
Total properties advertised are also continuing to swell as they reach their highest recorded level since last October 2008. For the month ending November 14, there were 241,114 listings, an increase of 18 percent compared to the same time last year.
Auction clearance rates decline
Meanwhile the number of dwellings sold at auction declined as auction clearance rates slowed across the nation. RP Data recorded an average clearance rate of 50.9 percent in the first week of November, which is the lowest clearance rate since the end of January this year.
During the same week, Brisbane showed the lowest rate of 17.1 percent with 21 properties sold out of 123 auctions while Melbourne had more success at 56.2 percent, 461 sold out of 820 auctioned.
More borrowers refinancing
One major outcome of this increase in properties for sale is that more people are likely to be refinancing their home loans to get a better deal. Damian Smith, RateCity’s CEO, says more borrowers could benefit from refinancing their mortgages.
“When interest rates rise, the spread between interest rates generally widens, which means many borrowers will be looking at paying much higher repayments than necessary,” Smith says.
“Australian Bureau of Statistics data shows an increase in the number of borrowers refinancing since April and there’s plenty more Australians out there that could follow their lead and find a better deal by shopping on comparison sites, such as RateCity.”
Smith said borrowers need to be aware of potential fees and charges for exiting your current loan early and costs for setting up the new loan, so determine whether you will be better off by moving the remainder of your loan to another lender by working out the costs first.