Monday, 19 March 2018

Sydney, Melbourne housing boom is over, auction clearance rates show

Best Asia Real Estate editor's comments –
Lawrence speaking at free real estate seminars January 2018
It appears that my predictions for Sydney and Melbourne's real estate are coming true.

 I'm continue to be almost 100% accurate on my predictions of real estate trends throughout the world.

Many of you may recall my predictions years ago that Singapore had hit a top and would crash.

Of course my best real estate call was predicting Bali real estate was "going to be equivalent to Hawaii real estate 30 years ago" which I made back in 2001.

If you own real estate in Sydney or Melbourne what should you do? 

Well if your a baby boomer and you don't need that big house you should sell, take your money put half of it into a secure long-term time deposit. Take the other half and invest in real estate markets that are happening such as Bali and Vietnam.

If you plan on staying in your home for a long time you should do nothing because eventually after a 20% to 40% drop in real estate prices Melbourne and Sydney prices will return to even higher levels as a does  every real estate market in the world.

In the meantime check out great real estate investments in Bali where you you can buy a three bedroom luxury villa with private pool that earns 15 to 20% per annum,  allows you to use it for home exchanges around the world and allows for  personal use as you want. Only $158,888.

This Bali luxury only 158,888

Sydney, Melbourne housing boom is over, auction clearance rates show

An architectural award-winning three-bedroom home in Annandale sold for $2.1 million under the hammer on Saturday, above its $1.95 million reserve price. Mind The Gap

The Sydney and Melbourne housing boom is over as investors retreat further and sellers' price expectations continue to wind down.

Preliminary auction clearance rates, a proxy for how the housing markets fare week on week, were in the 60 per cent range for the two biggest housing markets last week, Corelogic data shows.

For the full week, Sydney's auctions cleared at a preliminary 67.8 per cent and Melbourne's clearance rate was 68.9 per cent.

While the volume of auctions was similar to last year, clearance rates for Sydney and Melbourne were higher then at 76.8 per cent and 77 per cent respectively.
The renovated 1930's five-bedroom family residence at 13 Wilks Avenue, Malvern, sold for $6.3 million

The weekend preliminary rates were also about the same at 66.5 per cent for Sydney and 67.9 per cent for Melbourne, according to Domain.

"Things are changing and the market is not as good as it was, but it's a very fair market," Cooley Auctions' auctioneer Damien Cooley said.

"Buyers certainly feel like the tides have changed ... but we won't call them buyers' markets unless clearance rates are less than 50 per cent."

A generally accepted auction clearance rate for a healthy market, where both sellers and buyers have equal bargaining positions, is between 50 and 60 per cent, Mr Cooley said.

With Sydney and Melbourne sitting just outside this bracket, many good properties with the x-factor are still selling at above-reserve prices as seen with the sale of the architectural award-winning three-bedroom home at 35 Reserve Street in Annandale in inner-west Sydney.
A local couple bought the 251 square metre Annandale property, part of which was a corner shop built in 1898.

It sold at $2.1 million under the harmer on Saturday, above its $1.95 million reserve price. A local couple bought the 251 square metre property formed from a corner shop built in 1898 and adjoining terrace.

Belle Property's Robert Clarke and Michael Hallit handled the auction which had five active bidders.

The large 1.56-hectare landholding at 2679 Old Northern Road, Glenorie, in the trending north-west region of Sydney, sold at auction on Saturday for $10.2 million through First National Dural. It was the most expensive property sold in the city at the weekend.

Melbourne's most expensive house sold was the $6.3 million, renovated 1930s five-bedroom family residence at 13 Wilks Avenue, Malvern. The luxurious home sits on a 913-square-metre block. RT Edgar brokered the sale.
The renovated 1930's five-bedroom family residence at 13 Wilks Avenue, Malvern, sold for $6.3 million

In Port Macquarie, on the NSW north coast, owner occupiers bought what they couldn't buy in Sydney, paying $1.35 million on Sunday for five fully leased units in a whole block at 26 Home Street.

"You can do that or pay the same price for a two-bedroom unit in Randwick [in Sydney's eastern suburbs]," Mr Cooley who presided over the auction said.

A four-bedroom family home at 149 Matthew Flinders Drive sold for $1.176 million while a six-bedroom retreat with a gym and office on a sprawling five-hectare estate at 435 Rawdon Island Road sold for $2.35 million. Elders Port Macquarie marketed these properties.

While the days of investors buying at a frenzy on the "fear of missing out" are over, these and other cashed-up buyers are still holding out for the market to cool further to snap up some good deals, Mr Cooley said.

"The market could go lower, absolutely it could. There is more pressure on clearance rates with more properties on the market [leading up to Easter]."

Auction clearance rates have already started heading towards the 60 per cent range since late last year but rose again when the market resumed this year, according to Corelogic.

Before that, the last time auction clearance rates hit the skids to stay in the 60 per cent range was in 2015 when the Australian Prudential Regulation Authority put a 10 per cent cap on the growth of investor loans for banks.

"Part of the slowdown is due to investors having difficulty getting finance. There are investors who are seeing opportunities whereas others are holding up," Corelogic's Kevin Brogan said.

"They are waiting for the perfect property rather than rushing in to buy."

But with banks starting to loosen up investor lending and APRA looking to reverse the 10 per cent cap, there might be an incentive for investors to return to the market, Mr Brogan said.

Others like BIS Oxford Economics' Robert Mellor said their return was unlikely with house prices already falling or stalling.

New apartment sales have also slowed into what developers call a "normal market". While foreign buyers have mostly departed the market there was still plenty of appetite for well-located apartments from first-home buyers and owner-occupiers.

On Saturday, COLI Australia, the property development arm of China's China State Construction Engineering, sold 60 of 120 apartments at its first project in Australia, Neue by Coli in Macquarie Park.

The 285-apartment project sits on a corner site next to Macquarie University.

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