Hi,
I agree with you Singlefished. If a property is sold prior to auction, then it should not be included in the Clearance rates as it never went to auction.
The Clearance rate should only include those properties where by the public(a buyer) had the opportunity to place a bid in at a live auction.
I think this issue is just part of the ongoing problem of trying to analysis RE statistics especially median prices over a short period of time 1-3months.
The only way to determine if a market is on the rise or fall is to study a small segment that you are interested in. I know, that in the area of South & Port Melbourne, Victoria house prices are down approx 10% off peak. My defined segment in the sector is houses/townhouses 2-3 Br b/w $500K & 900K. To ascertain what the market is doing, I have been attending auctions, keeping an eye on what comes onto the market, when, what price, for how long and trying to establish the end selling price. Quite a few properties over the last 6 months have been taken off the market and rented out. The one thing that stands out is that the asking selling price and the rental price for these property is telling of no more than 4% Gross returns. While this sounds alright compared to returns on bank deposits, it may seem crap in the next few years if property only drops 4% per year, then the bank deposit will look good.
Even my above statement cannot be taken as black or white, it also depends on the situation of the property holder. If they own the house outright, they may see bricks and mortar as a safer option than trusting the banks to hold their money. If the house owner owes 100%, then selling know would seem like a smarter option than to keep losing on a investment that more than likely will see no CG this year or the next. But even then, if we say that the owner bought 4 years ago on 100% interest only loan, the CG over those years will have left them will 30%+ equity in the home, leaving them some room to wait before selling (-equity).
So, the subject of property increasing for years has many facets that can be discussed. What might be interesting to debate is why did property prices rise 100% in 7-10years and can those determining factors change due to the current economic climate.
I for one see that if cheap and easy credit is reduced, then this alone will stagnate property prices for several years. And if, unemployment increases this will see stagnation to falling RE prices.
Prices coming down 40% is a black and white statement, it would seem more prudent to place a percentage on a percentage.
Eg Property prices for 09 over 500K to :
Stagnate : 10%
To fall 10% : 45%
To fall 20% : 25%
To fall greater than 20% : 20%
Thus, I believe that prices more than likely fall 10% this year, I have not totally ruled out that they won't fall more than 20% but I think it is unlikely, whilst I think it is highly unlikely that they will stagnate. No I give 0 chance they will increase.
If I was to give figures for properties under 500K, then they would be different to the above, but I have not studied this market that is being support from government through FHBG.
Cheers
Benjamin