June 16, 2011
It’s a buyers’ market in Melbourne; auctions go gangbusters on the Sunshine Coast; properties are overpriced in WA, and if you’re looking to invest, units are the way to go.
If you’re looking to purchase property in Melbourne, now could be a good time to save money on your home loan with auction clearance rates plummeting to lows not seen since the Global Financial Crisis.
In Melbourne in late May, clearance rates slumped to 53 percent, the lowest since November 2008. A spokesperson for the Real Estate Institute of Victoria said many vendors were dropping their reserve price in order to sell, and that many deals were being done over the kitchen table after the auction failed to yield a desirable result.
Research from RP data reveals Melbourne vendors are reducing their asking price by an average 6.5 percent in order to sell their property. For example, a property with an asking price of $500,000 might be snapped up for only $467,500.
In contrast, auctions remain hugely popular with vendors and investors on Queensland’s Sunshine Coast. Local research from Raine & Horne, Mooloolaba, indicates that homes sold at auction were reaching reasonable and satisfactory prices.
Meanwhile in WA, there are currently around 18,000 properties for sale, but Geoff Baldwin from RE/MAX WA believes only 5000 to 6000 are priced within three percent of their selling price. It’s a problem, he says, that creates unachievable prices in an already bloated market.
Those looking for high returns would do well to investigate the apartment market. Unit rentals are up 4.9 percent for the year, compared to 1.3 percent for houses.
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