Some of the market commentators have seen a 78% clearance rate as a sign the market is faltering. There were over 1300 properties reported as sold to the REIV last week. This only happened 8 times last year and only 3 times in 2008. The last time there were 1300 sales in a week was before Easter.
It is true the very top end is becoming more difficult for vendors. Anything over about $2M is unlikely to be attracting large numbers of people bidding. There are usually one or two interested parties for each property and the selling agents who know their “stuff” are seeking to negotiate privately more and more.
Properties under $1M the still had exceptional clearance rates. The private treaty sales even higher! Whilst most of the outskirts of Melbourne in the new estates may take a hit due to interest rates rising, the inner city properties out to about 15 – 20km will continue to grow regardless of the interest rate increases. I have stated this before, and I will state it again: the only statistic that will change the level of demand for inner city dwellings will be the Unemployment Rate. This, and the job growth is the major factor that controls immigration and therefore by extension, population growth. This is the major factor causing dramatic increases in house prices.
It is more and more important to get good advice when purchasing property in Melbourne. Many vendors have dramatically unrealistic expectations for their properties. As a purchaser you must keep yourself informed as to the current trends in the market place.
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