Market Comment – Monday October 13th 2008

Print This Post Print This Post

There has been a drop of about 6% in the total sales within the metropolitan area last week. Unfortunately, the “clearance rate” bears no resemblance to what is going on in the market, except by coincidence. Between all our advocates we visited nearly 15 auctions over the weekend, only one of which sold under the hammer. All the rest were negotiated under the same conditions as any normal private sale.

If you are buying a home in Melbourne you need professional advice. Advice that is designed to assist you not the vendor. If you cannot accurately assess what a property will sell for, you could be paying 10% too much or miss out on the bargain of a lifetime.

We have bought several excellent properties at very reasonable prices lately and also some very good properties at excellent prices. Professional Real estate Agents are very good negotiators. The vendor is paying a fee to have somebody to represent them during the negotiation; any smart purchaser will do the same.

Whilst some analysts are estimating the last three to four years growth has been wiped off share portfolios, Melbourne’s property prices have risen over 10% in the last year. We have very low vacancy rates, a population increasing faster than any other capital city in Australia and housing approvals for new homes dropping.

The RBA dropped interest rates on Tuesday and have strongly signalled further rate cuts in the coming months. Rental increases are getting larger and more frequent. This means the difference between cost of borrowing and income produced from rental return is getting closer. Investors are flooding into the market.

If supply is decreasing and demand is increasing there is only one way for property prices to go. Property prices will increase dramatically over the next 24 months. Buying now is one of the best ways to safeguard your future prosperity. The statement “as safe as houses” is very apt in the current economic climate.

Come in and have a chat or attend one of our free seminars and see how we can help you buy your next property.

Ian James

Share this Market Comment

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.

Top