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Surprise bounce-back confounds

Discussion in 'Real Estate' started by Billv, 29th Jul, 2008.

  1. Billv

    Billv Getting there

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    Sydney, NSW
    For a week with plenty of bad economic news - another meltdown in the sharemarket and higher-than-expected inflation figures - yesterday's property market remained surprisingly unaffected.

    The Real Estate Institute of Victoria reported a clearance rate of 63% for 442 auctions, with Saturday's market avoiding the dip in sales that has accompanied other recent financial shocks, such as bank interest rate rises.

    "The clearance rate is pretty much bang on (the average) we've seen for this year," REIV chief executive Enzo Raimondo said. "People have also been surprised by the positive growth seen in the June-quarter median house price figures released this week, which rose by 4.9% across the metro area."

    Surprise may be too soft a term, with many agents, buyers' advocates and analysts seeing their predictions of across-the-board price drops prove well and truly off the money.

    It's causing a bit of confusion, especially in light of the weaker competition and lacklustre bidding observed almost all year.

    "There doesn't seem to be any rhyme or reason to it," said buyer's advocate Chris Koren, of Morrell & Koren. "The market is up and down, up and down . . . and it's really segmented, depending on the quality of stock and the area."

    There was also a lot of talk at the coalface yesterday about the growing reluctance of prospective buyers to bid at auction, apparently in the hope of picking up a post-auction deal. Nearly a quarter of all properties are continuing to be passed in on vendor bids.

    But buyers pursuing this strategy aren't always getting what they bargained for, with some after-auction negotiations returning remarkably strong sale results.

    Take the double-fronted Victorian house at 37 The Ridgeway in Kensington, which sold for $830,000 after passing in for $90,000 less through Lou Rendina Real Estate. The three-bedroom property opened on a vendor bid of $700,000 and attracted just one genuine bid before it was all over.

    "Two other interested parties didn't bid and they lost out because they didn't secure the exclusive right to negotiate as the highest bidder," Mr Rendina said. "It just goes to show that vendors can still get the price they want if it's a quality property sought by a motivated buyer."

    The highest sale reported to The Sunday Age yesterday was also a property that passed in and sold afterwards, although 22 Keats Street in Sandringham did attract three genuine bidders. The five-bedroom family house passed in for $2.05 million through Hocking Stuart and sold for $2.2 million.

    MORE HERE
    http://www.domain.com.au/Public/Art...Index&headline=Surprise bounce-back confounds
     
  2. Thudd

    Thudd Well-Known Member

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    Perth, W.A.
    I noticed this on the weekend at an auction I attended. The bidding started with a vendor bid of $600k, there was a single bid of $620k, then after zero further interest the auctioneer made a second vendor bid of $700k, which at the time I figured was either at or very near the reserve price. At that point it was passed in. Yet there were at least 3 serious buyers there.

    I guess they weren't serious enough for the seller, because the property is now on the open market at $780k.
     
  3. Billv

    Billv Getting there

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    Many buyers are on the sidelines and waiting.
    I think many Vendors are not ready to sell at a lower price....yet :)

    Cheers
     
  4. Jacque

    Jacque Team InvestEd

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    Don't forget too that not every buyer is necessarily prepared to buy at auction, or else wants more time to negotiate more favourable terms. If they're in no mad rush they will wait in the hope that a property is passed in and negotiate in the days following.