Share on Facebook Share on Twitter Share on Reddit + - Homes for sale surge, rentals fall By Leith van Onselen in Australian Propertyat 9:18 am on May 14, 2012 | 81 comments Login to access MacroBusiness Members special reports. If you are not a member, sign up here. Please fill in the following form to login Username: Password: or Please fill in the following form to subscribe * Username * Email * Password About Latest Posts Leith van OnselenLeith van Onselen is Chief Economist at the MB Fund and MB Super. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs. Latest posts by Leith van Onselen (see all) What happened to following the COVID-19 science? - October 23, 2020 CoreLogic weekly house price update: Big rise! - October 23, 2020 Links 23 October 2020 - October 23, 2020 Share on Facebook Share on Twitter Share on Reddit + - YOU MAY ALSO BE INTERESTED INCoreLogic weekly house price update: Big rise!In the week ended 22 October 2020, the CoreLogicSydney's auction market continues to strengthenCoreLogic has released its final auctionAUSTRAC demands property money laundering lawsThe CEO of AUSTRAC - the Australian GovernmentWhy Australia needs more housing stimulusA group of university academics have called on Comments dam May 14, 2012 at 9:32 am Still no spike in rental prices, another under supply myth squashed. That s going interesting in few months time when all these cash trapped “investors” will have to put back their unsold house for rent ASAP. or they will have to settle for less Avid Chartist May 14, 2012 at 9:36 am For the ACT, I think they are on the right track with the For Sale numbers. But wrong with the For Rents. Local website allhomes is showing 20% more places For Rent than the same time last year: http://www.avidchartist.com/2012/05/canberra-and-queanbeyan-housing-stock.html campbeln May 14, 2012 at 11:11 am Thank you for this! We are renting and the wife has been wanting to move into a different rental for a few months now. You know, some place without a leaky roof, possums in the roof space, leaky gutters, twice the water bill thanks to leaky taps and toilets, carpet that should have been replaced 5+ years ago… Short of the carpet (which is sorta ok with a 2 and 4 year old), none of this was apparent at rental. I’ve been saying to give it a few more months as winter is slow and rents will be falling. So, again, thanks for this! GunnamattaMEMBER May 14, 2012 at 12:35 pm Its weird you know. I have come back to Australia after living OS for years, and have deliberately held off on buying a place because most of my dough is in foreign currencies (and I reckon now is an abysmal time to convert) and because I think real estate prices where I have moved to (Geelong) are going to take a kicking sometime real soon. I have discovered that those renting are very much treated as lepers by real estate agents, and you have described my place (the one I have rented) almost as though you were sitting in it. I have just finished writing to the agent asking them to do somehting about a roof leak. campbeln May 14, 2012 at 1:11 pm Heeheehee, well let me start by saying I am definitely laughing WITH you. Look into your rental docs/laws in VIC, but here in the ACT, the owner has either 4 or 6 weeks (don’t recall off hand) to action the repair request. If they do not, you are allowed to get someone out to make the repairs and remove that cost from the next rental payment(s). Now… we’ve not done this “nuclear option” as of yet because we want to stay on the good side of the owner, but the possums in the roof cannot be healthy for us down on the ground floor! And with winter coming up, we will definitely need the ceiling in my daughter’s room replaced before it collapses (I am not kidding, it’s that bad). What I have seen with our owner (and this is my first rental at age 33/34, owned before this) is that he is nickel-and-dimeing everything, so I have a feeling he’s cash-flowing the property(ies?) probably just barely. I’ve told him a number of times that he’d best get the gutters replaced, else he’ll have rot set in the eaves, but he is completely disinterested. I have a feeling this represents a lot of property “investors”. The RE agents just seem lazy. Our act simply as middle men, forwarding emails and literately nothing more. It’s both good and bad to hear other’s are having our experience! Hell, it’s funny you mention overseas savings, us too! Common 60c to the USD again! Hold tight, we’ll end up laughing in the end! Bob Sickle May 14, 2012 at 1:27 pm I removed the possums in my Mums house in Turner using a cage borrowed from my sister who works for Canberra Parks and wildlife. Easy as, let them go up on Black Mountain reserve. However your biggest challenge is to get a cage – not sure where you would be able to ‘borrow’ one from but there must be somewhere as it is a big problem in Canberra for many. Avid Chartist May 14, 2012 at 2:03 pm I had possums living in a fireplace of a place I previously rented in Yarralumla. The roof leaked also. I can’t remember now the excuse the landlord gave for not wanting to pay to get the possums removed, but I do remember what he said when I offered to climb on the roof and lay a trap myself: “Well if you do that it will be your fault if the roof leaks get worse”. I hope we are not talking about the same place or landlord! campbeln May 14, 2012 at 3:42 pm We tried the cage in the roof space for more than a week, no dice. The landlord did eventually pay a handyman to come out one *morning* and plug up the hole they used to get in. Of course, this was all wrong and I called pissed they had done it (as they were now trapped in the roof space). I eventually tore out one section to let them out, but they have since created a new access route thru some rotted flashing boards out front. We were told he tried to get the one company in Canberra that does possum trapping out, but couldn’t get them on the phone… ‘Course this being Canberra, I can’t fully doubt the story. The biggest fear I had was if there were babies in the roof. but being winter now I may try again to get them out myself (as the owner has zero interest). And we’re not in Yarra, so a different sh*tshack =) The owner has been good about me doing little odd jobs without any threats. Hell, he asked me to clean the gutters to try and fix the eves problem. I then told him what an IT contractor makes per week in Canberra and that if I were to be injured his homeowner’s insurance would be covering that cost. He then offered to come out and do it himself =) Avid Chartist May 14, 2012 at 11:34 am Thanks for the response campeln. In the short term I’d be surprised if ACT rental prices drop, except maybe for apartments, as there is a glut of new apartments around town. But that’s a finger in the air guess. One thing I’ve learned about markets, it’s that they are not a physics experiment ie. they don’t respond rationally to force. So the “force” of increased listings won’t necessarily result in reduced prices, as there are many other factors at play. campbeln May 14, 2012 at 11:49 am Very true! Sage advice indeed, so I will attempt to keep my own hubris in check 😉 But there are a lot of cross-winds developing here in Canberra that SHOULD make it “better” for us =) Even if rents don’t fall, per-say, at least there “should” be more per pricing strata to choose from. And I do have to say we are in a rental that is a good $30-50 cheaper per week than it “should” be, ‘course that was before we learned of the useless roof and the possums =) dumb_non_economist May 14, 2012 at 2:43 pm AV, RE Physics 101: Force = time x money! The Claw May 14, 2012 at 9:45 am I keep hearing about all of these things that will lead to lower prices. In this case an increase in inventory, but shortage-deniers have also claimed the 2005 census unoccupied dwellings would do it (it didn’t). They also claimed that newly-built towers dark at night would lead to a crash (didn’t either). Some even used Ireland as proof. When can I buy a fair-priced house? When can I rent at a fair price? Serenco May 14, 2012 at 10:09 am property is one big con game, all you gotta do is wait for the confidence to go out of the market. At that point people will start to notice all the empty towers etc. Forrest GumpMEMBER May 14, 2012 at 12:54 pm +1. In the US, Ireland, Japan, UK and Spain, thats exactly what happened. People simply stopped believing the “Myth” that house prices double every 7-10 years, and then the system came down like a deck of cards on a polised timber table. bskerr2 May 14, 2012 at 10:22 am The abundant supply Claw is causing downward pressure on the sellers bottom line. Talking with a mate at Ozy Home loans he was telling me a number of sellers are still trying to get at least 100K more than what the property is now worth. Though in the news papers and realestate.com.au there is the listed sales price, the actual buy price is much less. He said that most places are now at least 50K over valued. As a buyer most people should just knock off 50K then start to bargain. poid May 14, 2012 at 10:48 am you continue to confuse supply shortage with demand. The shortage you speak of disappears as persons per household begins to increase after hitting all-time lows. This is a dynamic seen across other markets where a shortage was assumed to be present. The Claw May 14, 2012 at 12:26 pm This is a dynamic seen across other markets where a shortage was assumed to be present. I am dying to see the evidence of this. Have you got any? AB May 14, 2012 at 12:53 pm California? http://www.macrobusiness.com.au/2011/04/so-much-for-the-californian-housing-shortage/ Yatima May 14, 2012 at 1:21 pm Sorry AB – didn’t refresh my browser! Glad we both thought back to the same example tho. Yatima Yatima May 14, 2012 at 1:20 pm Perhaps the housing shortage identified in California in 2006, shortly before the bottom fell out of the market. http://www.macrobusiness.com.au/2011/04/so-much-for-the-californian-housing-shortage/ “The California Building Industry Association (CBIA) continues to express alarm over what it calls an ongoing housing crisis in Southern California. Alan Nevin, the association’s chief economist, projected in a 2006 CBIA Housing Forecast that only 185,000 to 205,000 building permits will be granted this year, far short of the 240,000 new homes needed each year.” Pfh007MEMBER May 14, 2012 at 12:58 pm ‘…As persons per household begins to increase after all time lows….’ What is the basis of 1. The assertion that persons per household have hit all time lows 2. That they will increase and not fall further. Have you detected a surge of old people keen to move back in with their children and young people happy to stay home with mum and dad? poid May 14, 2012 at 2:15 pm You can see in the ABS household survey data; the low was achieve around the 2006/07 timeframe and has been trend upwards since. i believe UE and possibly Cam Murray have blogged about it in the past. As far as i’m aware that upwards trend has continued. The ABS should be issuing an update shortly i think? Frankly i’m surprised that this is even news to anyone; i thought such a basic demographic feature would be common knowledge. As for the projection to increase and not fall, i’m not the only one making that call. I’ve seen in other presentations (ANZ comes to mind), though they often note a different cause backwards (ie that housing will remain unaffordable and push the persons per household figure up: i think that this ignores the real driver which is debt saturation, prices are an effect of this) Julius May 14, 2012 at 4:25 pm Pfh007, Don’t know about a surge of old people moving back with the kids, but there sure as hell is a surge of old people moving into retirement villages and age-care facilities. Grab yourself a copy of the “Senior” newspaper (free copies available at most pharmacies) and have a look at the hundreds of retirement villages advertising therein. As for the kids happy to stay home with mum and dad – you’ve got to be kidding! I know of at least half a dozen immediate family who can’t get rid of the buggers! It’s the standout phenomenon of the last decade or so. If you read “The Weekend Australian” property section on the weekend, you would have seen that the lead story, “Sharing the Pain” was about how to buy a house as tenants-in-common with friends and/or family. Another great way, sponsored by your local friendly real estate agent, bank, (fill in approriate parasite here) to enable people to “afford” property. Reckon if that takes off, the persons per household will tick up a bit, eh? campbeln May 14, 2012 at 11:23 am The market can stay irrational longer then you can stay solvent. Do you think that the confluence of the number/percentage of unoccupied dwellings, private debt saturation, more rentals on market (http://www.avidchartist.com/2012/05/canberra-and-queanbeyan-housing-stock.html), more homes for sale, developers seeing a saturation in units (http://www.canberratimes.com.au/act-news/no-sale-units-reaching-saturation-point-20120513-1ylaw.html)… makes the market more or less dangerous, price-falls wise? Now… I feel ya! We’ve been watching the US market since late 2005 to buy over there (dodged that bullet!), and I do hate to say, but I’ve read a number of times that the run-up and the deflation roughly match (ex-government BS, like FHB grant, etc). And sadly, even in hte states this has been the case roughly speaking see: http://www.ritholtz.com/blog/2011/04/case-shiller-100-year-chart-2011-update/ . It is only just now that buying in California is starting to become a good idea, some 7 years after the peak. As a renter here in Canberra, and with our peak seemingly just passing, I’m not thrilled by this prospect. That means that as we also wait for a place to buy in Canberra, we may well have to wait 10 (yes TEN) more years for the bubble to deflate, see: http://www.allhomes.com.au/ah/act/research/property-report/view But with Europe, the US, China and the fact that the only part of our economy going gangbusters (well, was) is mining, Negative Gearing, and seemingly everyone relying on massive yearly gains in RE I’m thinking we may well have a more rapid fall for Australia (we need to catch up with the rest of the world), which is not helped by the fact that a lot of mortgage funding is sourced from overseas… We’ve got a lot of weaknesses piling up! Not having a recession in Oz since 1991 is not a sign of strength, but a massive sign of danger. That is a lot of dead wood on the forest floor! Capital Appreciation May 14, 2012 at 12:29 pm Great points above. If it makes you feel any better I’d say Canberra is about one year or so on from the top. I know not much appears to have changed on the surface (e.g. median prices are only slightly lower), but it is pretty remarkable how quickly things have changed. In 2009-2010 there was barely any room to put your thongs by the welcome mat when you went to an open house, and people were just climbing over each other to buy. Now everything’s gone much quieter and people are starting to see the elephant in the room. Could it swing lower yet? Heck yeah and there’s some strong evidence/headwinds to support that. But whether it will, is as Avid mentions above, anyone’s guess. campbeln May 14, 2012 at 1:20 pm Oh, there is a definite buyers strike, compare the charts “Median Price & Interest Rate” to “Sales Volume by Number of Transfers” in the AllHomes link ( http://www.allhomes.com.au/ah/act/research/property-report/view ). I saw this in Cali too in 2006 or so. Sellers “know their homes are “worth” $X because the neighbors home sold for $X 6/12/18/24 months ago! So my cockels are warming a tiny bit. But, thank you for the reassurance! tone May 14, 2012 at 12:59 pm lol, prices *are* lower BubbleyMEMBER May 15, 2012 at 8:20 am *lower* sadly does not mean affordable, or value for money. At least not yet. Jarrod May 14, 2012 at 9:49 am Yes I would agree that it is a case of property speculators putting their houses on the market trying to cash in before it all goes bust. It must be hurting them even more not being able to sell and not having a rental income to partially cover there interest costs. Alex78 May 14, 2012 at 10:11 am Another dynamic must be the shift from selling back to renting after having no luck. This definitely seems to be the case in inner North Melbourne. The number of apartments and houses for rent would have easily doubled over the last year. redmond May 14, 2012 at 10:24 am Quote “A potential explanation for this phenomenom is that some significant portion of property investors have removed their properties from the rental market, kicked out their tenants, and listed them for sale empty” Sounds like a reasonable explanation to me, will watch with interest. Al May 14, 2012 at 11:30 am Not sure about this one. Personally I would keep the tenants and list for sale without losing rental income. Open house inspections could eventually annoy the tenants and they just move out and find a new place to rent. innocent bystanderMEMBER May 14, 2012 at 12:00 pm +1 exactly. altho r/e agents like the property to be empty cause it makes home opens easier and puts pressure on the vendor. think UE should have toned that comment down 🙁 Felixfrost May 14, 2012 at 12:23 pm If you are told your property is for sale you start looking around for a new place . . . they might not have been empty when they first went up for sale. Yatima May 14, 2012 at 1:28 pm This is actually my situation: – Was renting a place – Was put up for auction, with a heap of open inspections – Auction was just over a month before the lease came up for renewal. – Owner got a bid at the top of the advertised range, but passed it in. – I put in my notice the and moved to a nicer place nearby. There were plenty to choose from compared with when I last moved. – Couple of months later, it is still up for lease on realestate at a lower rent than I was paying. Cheers GB May 14, 2012 at 1:06 pm yep, that what happens. tenants get sick of endless open for inspections with landlords asking 100K more than the place is worth and move out. tenants (smart ones anyway) wont move into a rental thats for sale. becuase investors / speculators are leaving in droves the agent tells them its more likely an owner occupier will buy it so if you put a new tennant in on a 12 month lease no owner occupier will buy. then is double whammy time for overgeared property speculator….cant sall and cant let. empty house (but not advertised for lease so looks like rentals are falling) sitting on the market massively overpriced hoping some poor sucker FHB or owner occupier will purchase at dreamtime prices. Soon it dawns on the vendor that its actually them that is the real sucker. reusachtigeMEMBER May 14, 2012 at 1:44 pm Good point tsport100MEMBER May 14, 2012 at 2:38 pm Such landlords will all soon start to go broke at a vast rate of knots: 1)Negative geared to start with so rent doesn’t cover mortgage, 2) property maintenance costs come out-of-pocket. 3) Kick out tenant to sell so holding costs sky-rocket. 4) Add out-of-pocket ‘renovation and repair’ costs to make up for the negligence while letting to ‘cock’ it up for a sale. 5) Asks for ‘old’ market price, which is min $50k above ‘new’ market price. 6) Most are total amateur investors so will passes on all ‘low’ offers! 7) Add advertising cost to repair and holding costs… 8) Then add that some ‘agent’ will get them to sign an exclusive deal so the property will spend maximum possible days on market. Q: How long can these people lose money by the truck load before property ‘fire-sales’ start?? A: Until the mortgagee comes to foreclose! Keep an eye on long term property sale listing and once given some rope, make them an offer they can’t ‘afford’ to refuse and get the ball rolling for a market ‘correction’ persnickety May 14, 2012 at 3:54 pm Think there’s one of those near me- I walked past the sale sign advertising “40k reduction in price”- it’s a 2 bedroom unit in an old 6 pack. If they started out by asking $400k i would be surprised. That means it is at least a 10% cut on price. manfin May 14, 2012 at 11:27 pm In my experience this lasts for about 3 months. The property doesn’t sell, then comes back up for rent. With the for sale sign still on the front lawn. Mav May 14, 2012 at 10:39 am That didn’t stop Comical Andy from being postitively ecstatic about the prospects for a revivel: http://smh.domain.com.au/real-estate-news/rates-jobs-house-prices-all-point-to-revival-20120511-1yg7s.html Note: As a precaution, he has disabled comments on the article 🙂 PS: I want some of the stuff he is smoking. Hewell May 14, 2012 at 10:47 am I dunno why they now disable the comments on all of Dr Wilson’s articles. They always attract large number of posts/traffic, which I suppose is a good thing for the business. Unless maybe their sponsors are complaining? redmond May 14, 2012 at 11:06 am I hope the “Dr” has his bags packed away ready to escape the angry hordes to Panama if the bubble does pop in the 30-50% range. TheRedEconomistMEMBER May 14, 2012 at 12:07 pm Looks like Doctor Wilson needs to see a Doctor… the medical type. He looks like he has lost some weight. Probably worried sick as APM’s spruiking aint working and clearly the data they are producing is questionable at best. Felixfrost May 14, 2012 at 12:24 pm I wish he’d tell us what he got his doctorate in ? outsidetrader May 14, 2012 at 11:07 am Here’s an extract from his article: “The Sydney housing market is showing encouraging signs. Median house prices are rising…” Clearly he doesn’t look at the RP Daily Data, which shows prices in Sydney are falling more quickly than any of the other capitals – down 2.6% since this time last month. russellsmith55 May 14, 2012 at 11:46 am Yep the comments section is disabled and replaced with a domain.com ‘featured properties’ section, a domain.com ‘find a home’ search bar and an APM box called ‘hot suburbs’. Dr Wilson’s articles are clearly just an advertising lure to funnel fools into Fairfax market services. When Chris Zappone stops contradicting Dr Wilson I think I’ll just stop reading looking at theage.com altogether. GB May 14, 2012 at 1:11 pm “That didn’t stop Comical Andy from being postitively ecstatic about the prospects for a revivel” Comical Andy? or Spandy Andy? i think its the same guy: http://www.youtube.com/watch?v=PXYjgHC_Ycw russellsmith55 May 14, 2012 at 3:03 pm Don’t besmirch the honest and comprehensive dance stylings of Spandy Andy by comparison! Hagrid May 14, 2012 at 1:43 pm Note: As a precaution, he has disabled comments on the article LOL thanks AF May 14, 2012 at 8:45 pm It really annoys me when he disables the comments, I so want to “respond” to his rubbish but never can Sean G May 14, 2012 at 11:40 am Thanks for this update Leith. I also agree strongly with your theory about landlords kicking tenants out prior to putting the house/unit on the market. A few years ago I was renting inner West Melbourne when the landlord decided to cash in. He wanted me to remain in the property while it was on the market (obviously wanted his income stream to continue) but the Real Estate agent said it would be better if I left because they felt that vacant possession was a more attractive option for a purchaser. The house needed major repairs anyway – both the heater and the air conditioner weren’t working and one of the walls was falling down due to ground movement so I gladly vacated prior to all those repairs. Pity they refused to do them while I was living there but then again it was dirt cheap rent so you can’t argue in a situation like that – I’ve since seen the property on realestate.com.au for double the rent that I was paying with all new fittings and finishes. Diogenes the CynicMEMBER May 14, 2012 at 12:07 pm The pressure on WA rentals is causing some to give up and buy. Locally there have been a couple of sales where an old house was purchased and demolished to make way for a much larger establishment. I did this myself in 2006-2008 as it was cheaper then to buy, bowl and build than to buy new (about 15-20%) however now it is the other way around, established dwellings are trading at a 5-15% discount to new. Houston Rocket May 14, 2012 at 12:12 pm Our landlord is selling our place (it is one of 5 he has in the area). He turned down an offer way over the odds in 2010 and will be lucky to get within $250-$300k of that now. We are looking at an abundance of appalling rental alternatives. They all are asking huge money with not a cent spent since Bob Hawke was PM. The decent properties are all for sale it seems. The Financials keep laying off staff – more this morning at a well known Brokerage. All good though according to Dr W! VirusMEMBER May 14, 2012 at 12:32 pm You are looking at the wrong end! 🙂 How many staff did this Brokerage lay off? 10’s? 100’s max! Dominos is creating jobs in 1000’s!!!! so the net effect is “positive”.. yay note: sarcasm! 🙂 The Patrician May 14, 2012 at 12:46 pm Your location? Brokerage? Houston Rocket May 14, 2012 at 2:01 pm Lower North Shore Sydney. Headquarters in WA with a stadium there. The Patrician May 14, 2012 at 2:51 pm Thanks Houston I love a puzzle The Patrician May 14, 2012 at 3:06 pm Got it. Al May 14, 2012 at 3:41 pm I got it too. Houston Rocket works in the HR department of a brokerage house. Mav May 14, 2012 at 6:18 pm Houston, we have a problem.. GAME over: retailer goes into administration Aquarian May 14, 2012 at 8:59 pm Same over here in the Inner West! Abundance of dreadful dwellings. Or *gasp* almost cheaper to buy. Until you factor in longer term … sydboy007MEMBER May 14, 2012 at 12:34 pm Maybe the property investors have finally realised that negative gearing means they are LOOSING money. I’m hoping for a quiet deflation of the property market – stagnant prices and let inflation + income growth bring down the over valuation. This may not happen with the Govt and Opposition pressuring the RBA to lower interest rates further than they probably should. I read an article last year that said in Germany house prices in real terms have not increased over the last 30 years. People get long term leases and then in their 50s pay cash for a house to retire in. How did they achieve this amazing feat? The Federal Govt funds the states based on population. Jobs and cheap housing are the best way to attract people to your state. Maybe if Canberra had a similar funding scheme with the states here, we might see some of the stoopid zoning rules removed and cheaper housing on the market. I’ve still yet to have someone provide a logical explanation as to why rising house prices is a good thing. david collyerMEMBER May 14, 2012 at 1:17 pm UE is a bit dramatic with his ‘Rentals Fall’ headline, which is not borne out by the figures. Yes, rentals listings are down a little, but still within the orderly trading range ‘cept mining towns. The Land Values Research Group expects limited change to rents, up or down, outside CPI – even though it predicts a vigorous land price correction. We citizens are trained to expect prompt change and the nearest parallel, the share market can turn on a dime. Not so property. The return to mean will be agony for everyone. Those with big mortgages and traders will be bled, but a five year correction will feel like one is drained from a capillary, not an artery. Locked out buyers face an equally anxious wait with Andrew bloody Wilson calling every star-rise a new dawn. Those with plenty of cold hard cash and a pristine credit rating will clean up when rents>repayments. Will you be one of them? Don’t Buy Now! Ben May 14, 2012 at 1:21 pm Trailer parks, the way of the future… http://www.perthnow.com.au/business/wa-families-forced-to-live-in-tents/story-e6frg2ru-1226353723353 Greconomics May 14, 2012 at 1:58 pm “significant portion of property investors have removed their properties from the rental market, kicked out their tenants, and listed them for sale empty”. A reasonable conclusions, noting the increased rental listings in QLD. All the property-lord baby boomers have finally realised that negativie gearing doesn’t work in retirement, they can’t survive on $300 week rental income and can’t afford to repair / maintain their properties so they’re heading for the exits. Velociraptor May 14, 2012 at 9:06 pm I know many in exactly that position and taking that path. Velociraptor May 14, 2012 at 9:10 pm LVO has written abouth this. http://jesse-rotafortunae.blogspot.com.au/2012/05/nation-of-loss-making-landlords.html “Of these negatively geared investors, nearly three-quarters earned less than $80,000 in 2009-10, and the average loss was $9132 per negatively geared investor, or $176 per week.” “Not only are investment property holdings In Australia concentrated in lower-to-middle income groups, but also older age cohorts.” That last line 😮 somabluMEMBER May 14, 2012 at 3:16 pm Is it possible that the we are seeing an uptick in bank owned properties (repossessed) hitting the market ? Seeing alot of anecdotal examples in my atm. somabluMEMBER May 14, 2012 at 3:17 pm correction Seeing alot of anecdotal examples in my area atm. Al May 14, 2012 at 3:54 pm Interesting point. Repossessed properties would most likely be taken off the rental market and advertised for sale empty. roylefamilyMEMBER May 14, 2012 at 5:56 pm They are. It happened to me. The_MainlanderMEMBER May 14, 2012 at 10:28 pm What do you mean Roylefamily? thomickersMEMBER May 14, 2012 at 3:36 pm I still don’t understand why most vendors still put the reserve price above the advertised auction range. (eg auction range $650k-$700k, reserve $739k) russellsmith55 May 14, 2012 at 4:05 pm Logically it could be part of a strategy to lure in buyers that wouldn’t be interested at the asking price – then get them ‘invested’ in the outcome by participating in a ‘fun’ auction – then see if they’re now more emotionally committed and therefore more likely to meet the still-too-high reserve. Even better if the bidding just happens to reach or exceed the reserve Are agents allowed to hide the reserve price from everyone until someone meets wins the auction? If this is the case, it would be just another example of dishonesty from an already highly untrustworthy industry. bv2726MEMBER May 14, 2012 at 4:30 pm I am pretty sure that the treatment of the reserve price is different in each state. In Vic, the auctioneer can make declared vendor bids up to the reserve price (and this also then becomes the “passed in” price). Which is rather sneaky… bv2726MEMBER May 14, 2012 at 4:11 pm Its to make you go to the auction. If you are there, there is a chance you will buy. If you are not there, then it is guaranteed you will not buy. The more that are there, the more likely that 1 person will buy. Its just marketing twaddle. drsmithyMEMBER May 14, 2012 at 5:21 pm I have never understood why people buy at auction at all. It must be one of the most buyer-hostile scenarios known to man. thomickersMEMBER May 14, 2012 at 5:28 pm Its a spectator sport to me. Also the 650-700 price range is only met with vendor bids. So the auction runs very cold. A viable range to get people bidding would’ve been 575-625 (2012 price or my valuation). Strategic Thinker May 14, 2012 at 8:34 pm My experience from watching the sales and rental action in the past 12 months at a small townhouse development of 34 homes where I rent. (Eastern suburbs of Adelaide, community title with private park). House for sale, on market 10 months, empty for 5. Originally listed $590K, sold $490K. 2 other homes sell below list price by $15-20K, but quicker sales. House for rent, advertised at $450pw, then $425, $410 and eventually let at $395. Get the sense from watching the wider market and speaking with friends, family and people in the development and RE game that this is being played out a lot but noone wants to own up to what’s happening. Flipwilson May 15, 2012 at 12:05 am I’m seeing a fair bit of anecdotal evidence in my field that the mood is shifting as well as others have said. As a strange twist, my cab driver the other week was young and expensively dressed, well spoken. I casually veered the conversation towards his occupation, turns out he’s a real estate agent. He didn’t know what a bubble was, which I guess isn’t that surprising. It was kind of interesting to explain how positive sentiment can create a feedback loop to propel prices to unsustainable levels and watch the lightbulb go off. I feel sorry for the people who ‘bought in’ without ever thinking about doing any due diligence beyond asking the family friend who’s ‘good with money’.