Property industry wants stability in Canberra to boost sales

All the political Machiavellian machinations are hurting property confidence around the country.

Villa World, which sells affordable house-and-land packages, recently presented its half-year results and pointed the finger directly at the politicians.

It attributed its slowing sales to the standard global economic instability, along with interest rate uncertainty but then also blamed “the domestic political situation.”

It is the first real estate company to go public with the suggestion that the Gillard-led minority federal government’s inherent instabilities are impacting on house-and-land sales.

Villa World, which is dominant in the politically unstable state of Queensland, is just saying publicly what the industry has been thinking for many months.

Increasingly anxious since mid-2011, many in the property industry – from billionaires to sales staff – want some quick resolution. And they ideally want a change of government as well.

As hard as it is to nail the origins and connection, the real estate industry just reckons some confidence will return to the market with a dose of firm leadership from the Lodge and the Treasury.

The latest weakened weekend auctions results of course preceded the latest Rudd video flare-up.

Auction clearance rates dropped slightly in Melbourne and rose slightly in Sydney in the first weekend after all four big bank increased their interest rates.

The rate rises will certainly cement buyer caution and could also stall any improvement in the capital city markets, which had been set to record price growth.

The number of properties for sale in each city is still lower than at the same time last year.

The weekend clearance rate in Melbourne was 59% according to the Real Estate Institute of Victoria, down on the 64% clearance rate the week before and the 63% last February.

There were 579 properties put under the hammer in Melbourne, about 140 fewer than at the same time last year, according to the REIV.

There was a 54% clearance rate in Sydney, according to Australian Property Monitors.

Last week, 52.5% of Sydney properties auctioned were sold, and at the same time last year, 61% of properties sold, APM figures show.

APM senior economist Dr Andrew Wilson says the smaller volumes reflected the subdued market.

He says fragile confidence remains a significant barrier to increased housing market activity.

“Certainly there’s consistency in the lower numbers being offered this year compared to last year,” he says.

The most expensive house to sell in Sydney last week was a four-bedroom Federation Queen Anne-style house in Mosman that fetched $2.9 million.

The top property sold in Melbourne was a five-bedroom home in Beaconsfield Parade, Albert Park, which fetched $3 million plus.

This story first appeared on Property Observer


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