Auctions end year on a low note but prospects strong for 2012

Auction results from this past weekend showed clearance rates in Melbourne and Sydney in the 50s – as they have been for the last few months.

SQM Research managing director Louis Christopher told SmartCompany this morning the year's results were "pretty much in line with expectations".

"We thought at the start of the year we would see a 5-10% decline in the capital cities, and although numbers are still coming in that's what has appeared to have happened."

"We have Sydney, which has down a little bit better than that, but certainly you would put other cities into that category including Perth, Brisbane and Melbourne. Those capital cities have fallen into that category."

Christopher says the downturn in the property sector has been around for 18 months, and warns it may take awhile before any recovery takes hold. However, he points to encouraging ABS data showing housing starts and finance has been improving over the past four months.

"We think there will be a decline in the March quarter next year as well, but that is where it's going to bottom out."

Everything depends on Europe, he says. "If all goes well, we should see a recovery in the June quarter of next year. We'll see some indicators before then of how the economy is going, and hopefully that will continue."

This past weekend is emblematic of the year's results in clearance rates. In Melbourne, the Real Estate Institute of Victoria said only 254 properties sold out of 482 on the market, with a clearance rate of 53%.

This time last year, the clearance rate was 62%.

"This weekend is the final one this year with a substantial number of auctions – there are only another 40 auctions scheduled to occur before the end of the year," chief executive Enzo Raimondo said in a statement.

In Sydney, the city recorded a 50.1% rate, while Adelaide and Brisbane recorded rates of 26% and 28% respectively.

Christopher says these results may continue for awhile, but assuming the European situation doesn't deteriorate, will improve over next year.

"We'll see clearance rates go up to the 50s in February, and generally they will pick up from there."

"It should be noted over the next few months we'll be getting a few mixed signals from the housing market, but over next year the situation should improve."

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written by photoman001, December 19, 2011

Rubbish Mr Christopher! You can TRY and talk the market up but that's not going to work! Recovery? What recovery? The GFC second wave hasn't even hit the beach yet! Haven't you been watching the world news? The smarter experts (not anybody I see writing in Australia) predicted that there would be a much bigger crises following the 'small' hiccup over the past 18 months based on the history of the last two crashes. I will predict right now that the momentum of the world uncertainty will be felt for at least another two years and that the housing market will continue to fall for another year and maybe two. With people being shifted from full time to casual in jobs all over the country and hours being cut back only someone with something to gain from an improvement would predict that things will improve in the short term.

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written by David M. Markus, December 19, 2011

Please explain what fundamentals in the ecconomy point to an improvement in our sagging house prices. We know there is demand as our population is growing and so there needs to be fresh building starts. In Australia do we suffer from a shortage of land upon which to build cheap housing? Do we have limitted construction resources or labour? Surely housing is selling well above constrution costs and it is land values held artificially high that keep new hosue prices up. Is this sustainable as the global ecconomics decline?

Has America resolved its debt issues or simply swept them under the carpet for a while?
Has Europe resolved anything?
Will China keep consuming our commodities? (actually I think they might, only making them less affordable to the ecconomies in decline so accentuating the decline).
Will quantative easing create a massive inflation bubble as debt needs to be serviced?

Of course it is a great time to buy a house or unit.....if you can wait 20 years to sell it at a profit.

Good thing we still live in the lucky country where we can continue to grow through tough global ecconomic times.

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written by connaust, December 19, 2011

Firstly real clearance rates for what it's worth in Melbourne Sydney are more like 30-40% while record levels of stock are on market but not going to auction.

Australia's population growth has been slowing for past two years, the high growth was due to spikes in temporary residents several years ago mostly attributable to international students with new starts from offshore way down and dropping.....

The only bright spot maybe for those who rent their properties starting in the last quarter when first international students under new visa system may increase significantly....... if Australia and the education industry are able to promote effectively to offshore media i.e. students are welcome back...... big ask.....

How come all these property analysts do not know this let alone acknowledge how important international students were and are?