On Saturday one of the auctions I attended was of a 2-bedroom villa unit in Brunswick. After the quote range had been moved up during the campaign and unconditional offers were made, 5 people still fought out the property with it finishing at least $40k above the closest comparables in the area.
The clearance rates throughout March have entrenched themselves in the mid to high 50 percentile range and first home buyers are flooding into the market. And there isn’t enough stock for them to buy.
The economists, media and politicians are all happy to talk down house prices in a bid to sell newspapers or win votes, but in reality, we must remember that house prices have steadily climbed over decades in this country and centuries in other countries. We have had recessions, depressions, wars and droughts and still over the long-term house prices will climb.
I think we are looking at the bottom of the dip and during the slow down in winter we can expect to see the statistics show a fall in house prices, just as we have seen over the past 3 months, however, in reality, the better houses are not for sale. And when they do go on the market in Spring, I believe we will see a dramatic rise in price which will begin to affect the long term statistics.
Even if there is a change of government and the incoming government tries to hamstring the investment market, there should be enough pent up demand to raise house prices by the end of the year.
If you are looking to buy a good long term investment, whilst you will need patience to find the right one, it will be well worth while beginning your search now.
Ian James
Director
JPP Buyer Advocates