With more questions hanging over the economy and global markets this week than last, the real estate industry holds little hope for an increase in buyers this weekend.

Even before the dramatic volatility on the sharemarkets seen this week, auction clearance rates in Melbourne and Sydney had hovered around 50 per cent this year, from highs of 80 per cent in 2010, while home prices had declined. After the latest sharemarket wobbles, investors have now begun to price in interest rate cuts, giving buyers more reason to pause before taking the plunge.

‘‘Buyers are looking for a lead,’’ said Melbourne-based Ray White Port Phillip real estate agent Michael Paproth. ‘‘Are property prices going up? Are they going down? Are they stagnant? Really there is so much uncertainty with conflicting stories daily.’’

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The financial fallout in America is not going to do anything positive for investor confidence, however the agents this weekend were taking full advantage of the news to spruik the safety of investing in “bricks and mortar”. Without exception, in each auction preamble, there were comments to the effect that “the share market is crashing, and therefore there’s no better time to turn to real estate”.

Of course it’s in the best interests of real estate agents to spruik this message – but then, why not? Amidst all the conflicting headlines, the property market is happily singing its own tune. The clearance rate has been firmly in the 50s (the new “norm”) for some months now. We’ve had a flat market all year with minimal movement – interest rates are on hold, our economy looks secure – and if anyone was perturbed following the downgrade of America’s AAA rating, it wasn’t evident in property land this weekend. Numbers walking through opens and standing outside auctions gave the impression we’re in anything but doom and gloom. Of course, the crux is when will the window shoppers turn into buyers?

Click here for the rest of the article (Property Observer Website)