As predicted the reported clearance rate fell below 70% for the second week in a row and don’t hold your breath for any relevant data next week as it is Easter. Has the property market taken a nose dive, is it following the Dow Jones index. NO!
There were over 1400 scheduled auctions for last weekend. A new record for Melbourne. We know that supply and demand are the quintessential ingredients driving prices and where there is an abnormal supply there needs to be an abnormal demand to maintain the “Status Quo”. We had a normal demand for Saturday. Many good properties sold well and many not so good, didn’t sell at all. This is normal behaviour for the Melbourne property market. It was simply intensified because so many properties were on the market on one day. This is simply a matter of timing for Easter and Labour day making it the only main selling day for March.
Is the market the same as it was four weeks ago? NO! There are enough media outlets breathing forth gloom and doom. The Reserve Bank may lift interest rates again but they may not. What would happen if they dropped the rates? Everyone from the Prime Minister to David Koch on Sunrise has said the Reserve Bank has gone too far. I am not a world renowned economist. I don’t know if they have or they haven’t. But I do know if they level out the interest rate or, actually drop the rate, then the property market will take off, rapidly mimicking the growth of last year.
Buyers have a small window of opportunity whilst vendors have become a little “uncomfortable”. There may be some good properties to be had over the next few months and how long that continues for will depend on external pressures on our economy and how the media reports it.