Real Estate Update for the first quarter 2009
In what seems to be a few weeks here we are already into the fourth month of the year and as Easter approaches it is time to have a look at what the market has done in the first quarter of 2009
What we read in the media about prices is most usually based on what happened in the previous quarter. But if we look at last weekend, which was the last weekend for residential auctions prior to Easter, the result has helped answer a lot of questions about the health of the property market. This years trend of clearance rates in the mid seventies has continued with a clearance rate of 79 per cent from the 529 auctions reported. Overall it can be said that the market has performed above expectations in the first quarter of the year.
As I make my way around Melbourne as a Vendor Advocate and Buyer Advocate I meet agents in many suburbs and hear many stories and the overwhelming opinion is that there is not enough stock and agents are selling everything that they can get their hands on.
It is clear that the first home buyers are leading the charge with their boosted home savings grants in their hot little hands. The result is that prices of cheaper homes are holding firm and in some areas they are rising.
The top end of the market has softened, but not anything like what is happening overseas. In fact there are some instances of some very good results in the top end.
I was involved in the sale of a property in Hawthorn and the selling price was $110,000 above the reserve price.
If we look at the results from the December quarter we know that the median price dropped by 0.9 per cent, from the revised $430,000 in the September 2008 quarter to $426,000 in the December 2008 quarter.
As REIV CEO, Enzo Raimondo, said “the impact of current economic conditions has had a softer effect on prices than expected over the December 2008 quarter. The effect on the number of transactions, however, has been more noticeable, with a drop of approximately 25 per cent for the year. “The interest rate reductions late last year, together with the first home owners incentives, have helped to soften the effect on prices.
“As expected, property prices across the board reduced in 2008 – 3 per cent in the lower price bracket to 12.2 per cent in the higher price brackets, with a few exceptions. Suburbs that defied the trend were those mostly in the $500,000 and below price brackets, in suburbs such as Craigieburn, Deer Park, Ferntree Gully, Boronia, St Albans and Thomastown.
“In contrast, major reductions in the median occurred in the higher end of the market this quarter, in suburbs such as Brighton (-4.7%), Camberwell (-8.2%), Balwyn (-21.6%) and Kew (-12%).
It would seem that the first quarter has not shown a further reduction in property prices from the last quarter and I look forward with interest to the official ‘end of quarter’ figures, which we should be reading about soon.
I will keep you up to date
Cheers
Bertram
