Hi, Just thought I would share this story and hopefully start some interesting discussion on the lower end of the market - I'm sure there are many differing opinions out there at the moment... I recently listed a property for sale in a good suburb about 9km from the city (this is it). For the last 18 months I have been completing renovations on the property and had quite a few agents through for appraisals. Right before the share market crash and all the uncertainty that it brought with it, I had 3 appraisals that came back at $395k, $410k and $415k. About a month ago I contacted 3 agents again for appraisals and expected to get something similar price wise and the first two obliged saying "low 400s" whilst the third said closer to $450k. My personal research indicated that $430k would have been a reasonable price although up on a year ago... After a lot of deliberation we decided to go with the last agent and the property was sold for $447k before even hitting the internet. I would like to know what others thought on this are - could it be the effects of the FHOG Boost creating a bubble in this section of the market? Or possibly underquoting by several agents? Maybe I just got lucky with a really good agent? Im looking at buying again in a similar price bracket so I'm debating wether to wait a few months to see what happens to the market or just bite the bullet and buy straight away.
The banks certainly feel like it's a potential problem and have already taken steps to limit their lending to first home buyers, which I'm surprised has taken this long to do. FHOG has distorted the market and property is over priced by 50-70k (my opinion). I was only discussing this with someone about 6 months ago and they strongly disagreed with me, but I believe we'll see a housing bubble and property prices plummet as lots of young families have trouble paying their mortgage repayments as interest rates go up to counter the impacts on inflation and the even higher costs of banks getting credit from overseas. The banks also haven't IMHO provisioned enough for their bad debts on residential mortgages, in a hope "talking positively" everything will be well. That said next year if your looking for an IP you will find some at a serious discount! I'm not sure I'd be holding bank stocks at the moment, we're not out of trouble yet.
