Market Comment – Monday 29th November 2010

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398 pass in results were reported to the REIV over the weekend. And there will most likely be more after the REIV follow up 95 unreported auctions. We have to go back to December 2008 to see this many properties passed in on one weekend. 1197 properties were reported to the REIV as sold this week which is average for Melbourne. It’s a rough 50/50 split between private sales and those sold at auction.

It is always nice to be able to “We told you so!” And the media have just worked it out. “Market glut favours buyers” and “Savvy homebuyers set for bargain Christmas”. These are some of the headlines being used in the national papers today.

It was obvious 4 weeks ago that there would be an oversupply and that some good properties would be on the market for very reasonable process, and it is just as obvious that things will change over the next 8 weeks or so. IT WILL NOT LAST.

From the latest counting in the State Election, it looks like the Liberals have won 45 of the 88 Lower house seats. It is also being touted they may have the balance of power in the Upper House. If interest rates remain on hold next Tuesday, and the Federal politicians actually prove they can get one of their promises across the line (The National Broadband Network), we will begin to come out of the state of confusion and feel we can move on with our lives with some surety.

With surety comes decisive decisions. With decisive decisions, more people will buy property. With more people buying property there will not be an oversupply; there will be a stock shortage. Watch prices start to slowly rise in March 2011 in the top third of suburbs in Melbourne.

Obviously, the weekend had mixed results: 2/63 Wheatly Rd, McKinnon was quoted at 530-570K. It is a classic downsizer home, backing onto one of Bentleigh’s premier parks. One of 5, this 2 bedroom villa needed no effort from the auctioneer to swing buyers into action. Opening on a genuine bid of 580K – above the quoted range – there were 4 bidders eager to take part. Due to the pace of bidding the auctioneer didn’t get a chance to announce it on the market until 649K – however I’m assuming it had met reserve prior to this. The selling price was 661K to a couple of very excited girls who had just purchased it for their mother. Smiles all around!

8 Diosma, Doncaster – a nice 4 bedroom family home quoted $680K – $750K. Opening on a bid of 700K, 3 buyers were happy to compete. Again the pace was slow, and the auctioneer was forced to work hard to keep things moving. It passed in at 763K – above the quoted range, and we were told the reserve was 800K. This is a good family home worth a little over mid $700’s.

If you are considering a property purchase within the next 6 months, why not drop in for a chat. There is no obligation for our first meeting.

Ian James

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About the author

Ian has been operating his own businesses for more than 25 years. During this time the self taught lessons of building the business, dealing with staff, suppliers, clients and economic woes have been invaluable. Ian is a fully licensed Real estate Agent, a member of the REIV and registered with the Business Licensing Authority.

Buying property is not just sticking up your hand and outbidding your rival. It is an emotional, fiscal and psychological decision that needs to be planned and well executed. Ian is usually involved in over three hundred property negotiations per year; ranging from the $250,000 first unit purchase for a young couple to multiple million dollar residential developments. Ian's business background and endless numbers of negotiations make him one of the industry's leading negotiators.

Ian is married with two adult children, living in Patterson Lakes. He is a keen fisherman when weather and business allows the time.