Melbourne property gets “rattled”

So says the AFR:

Property experts say Melbourne property prices could be stalling after four multimillion-dollar properties failed to attract a bid in the past week.

Middle markets in Sydney and Melbourne, where properties range from between $1 million and $3 million, continue to be pushed along by investors, first home buyers and downsizers, particularly around inner-city postcodes.

But an increase in the number of sellers in Melbourne, attracted by rising prices and high clearance rates, is increasing competition and “rattling a few sale campaigns, which are not going to plan,” says Cate Bakos, a buyers’ agent.

…buyer fears about poor construction, oversupply and flammable materials continue to hold back demand, according to market specialists.

Characteristic of a very thin and vulnerable market. That said, there is little evidence of any material slowing in Melbourne yet:

I do expect the market to ease next year as the economy refuses to bounce, in part thanks to consumer doubts about apartments.

And a goodly external shock would test it, with unhappy results I’d wager.

David Llewellyn-Smith
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  1. Goodness, is it that time already? Are the first Tuesday bears already upon us crying for a Christmas rate cut?

    • Yep. You picked it. This is the MSM astroturfing positioning for some more lower teh rates. Which everyone loves.

      The $1m-$3m FHB market apparently isn’t firing har enough. Better get onto it to fix thing.

      • Too bad these clowns don’t understand the law of diminishing returns. Two more cuts will do next to FA.

          • Done nothing so far along with the single biggest stimulus in our countries history – clearance rates relative to long term historical volumes are running at 44%, prices still declining in 70% of suburbs, land prices crashing, stamp duty totally collapsed – yes, one rigged index is claiming thing are rosey – no one believes it – well, there are one or two, everyone else is sniggering.

          • I’m sure you’re right – when I see what the last ones end up doing I’ll look forward to the next ones.

            In the meanwhile, I’ll be patient.

    • Clearance rates relative to same time last year volumes with cleared auctions this year would be around 44% – nothing has changed at all except rigged indices and cherry picked data.

      ABS land price index confirms prices still falling as do stamp duty receipts – only the rigged, captured indices, vested interests and people selling their own book say otherwise.

          • reusachtigeMEMBER

            So if you disagree with the always-wrong 10+ year-old bear-sh1t housing-crash narrative of the commentators on this blog you’re being paid to be here? I’m being done over in that case and need to find an agent. Might get me more investment property deposit cash!!

  2. – My wife had a chat with her regular Sikh taxi driver heading for MEL airport on Saturday.
    – His mates were in a real jamb. They were trying to unload investment apartments. Absolutely no buyer interest. They were starting to panic.
    – As predictable as the sun coming up.

  3. A stock bear market / crisis would have begun ages ago were it not for so many pre-emptive moves by central banks, which means that when it does come round it’ll likely to one for the ages. No shortage of dim bulbs ‘warning’ of a 25% fall (!). Like that’s a big deal. The longer you put it off the bigger it’ll be – the last two saw 50% falls so do the math ..

    What happens when the next bear market comes round? Central Banks spring into action and deploy all that spare ammo they have. Oh wait ..

    Property will be decimated: the central banks are cooked, the consumer is well and truly cooked. Businesses will need to shrink dramatically or throw the towel in altogether. The debt -driven, mass-consumption economic model is toast. Enjoy its last days.

  4. Despite the evident bogosity of the clearance rate figures, they do give an idea of the trend, and at the moment the clearance rate trend appears to be downwards, which the quoted text confirms to some extent.

    The big question is whether that trend is indicative of market weakness and continues long term leading to a price plateau or decline, or if this is just a seasonal bobble as we head towards the end of the Spring selling season and into the Summer slowdown.

    And I do believe that Corelogic’s Sydney and Melbourne indices should be approached with a great deal of caution at the moment. If that data was displaying measurements from a sensor, my first thought would be that the sensor became defective on 12-Aug, and has been functioning erratically at best ever since.

    • as volumes peak by a fraction clearance rates start to fall. It just shows you there is no enough buyers out there. If employment numbers for Nova and Dec show similar trend as Oct then I don’t really care what Corelogic data reads – we are heading for a crash or major RBA and Gov intervention to defend house prices at the cost of everything else.

      • The RBA will do their feeble best, but I reckon they’ve shot their load. They’ve only got 0.75% left to play with, not 8% like 10 years ago. And the banks won’t pass it on anyway because it’ll hammer their profits.

        GovCo on the other hand, who knows what they might come up with in grants and giveaways and market support.

  5. …buyer fears about poor construction, oversupply and flammable materials continue to hold back demand, according to market specialists.

    I would have thought the upper end ($3M+ range) is immune to this nonsense? Since they would be better quality dwellings.

    • There’s expensive (well, for Canberra) new apartments here that I wouldn’t touch with Reusa’s. Water ingress etc.

      That being said, the place I’m renting is 2 years old and extremely well built, but that may be because the builder lives next door in the same block. 🙂

      • that builder should be given medal of Aus and he probably deserves it. But sadly the Gov will find a way to shut him down or if he is a wog then Peter to deport him as we can’t have such heretic in the building industry.

    • Remember, fear is the path to the Dark Side. Let go your conscious self and act on instinct. And the Force will be with you…

    • top notch = bigger cracks, more flammable. eg we used twice as much cladding to keep you cool in summer.

  6. Sentiment will flip to outright panic so quick.

    I had a chat to an owner of an agency in Melb who says he has the busiest schedule of auctions between now and Christmas in years. Was pretty chuffed with how this year is going… I didn’t point out that the buyers might not show up…