Interesting to note that the increase in pre-auction sales - accounting for 25 per cent of those listed for the weekend. Factor in the 50 per cent clearance rate and the answer is? Property is slowing down. So therefore if 25% of the market is sold prior to auction of 100% then this leaves 75% of houses that at auction a 50% clearance rate was achieved? Is this how it works? HUH?
Sigh. Inflation is the key here.
Australian Property Prices (Inflation Adjusted)
Interesting to note that the increase in pre-auction sales - accounting for 25 per cent of those listed for the weekend. Factor in the 50 per cent clearance rate and the answer is? Property is slowing down? So therefore if 25% of the market is sold prior to auction of 100% then this leaves 75% of houses that at auction a 50% clearance rate was achieved? Is this how it works? HUH?
What I do know is that it's a buyers market, and buyers are holding off from buying. There are too many conflicting indicators here in Oz. Uncertainty means that people aren't putting their hands in their pockets.
AGREE 100% ... this is a time of uncertainty and volatility in the real estate market place. The rate clearance is down but the pre sales is through the roof. Works out to still 62.5% of volume turnover. Some places have sold for more than the asking price at auction whilst others on a presale contract have just fallen short of the asking price but still gone to settlement??
Sure aint sunshine and lollipops for the greedy property developers ... a bit more like "Cloudy with a chance of holding costs"?
The last time i looked we were in a capitalist society .....you know make profit from property develop,trade shares.....just general wealth building.....
unfortuatley "GREED" is part of it.... yes..... no.... comprendey...
You missed the tone of the post Bigukrane. I am completely for making a profit on any kind of transcation whether it be property or shares or horse trading.
The GREEDY property developers have a chance of holding costs due to lack of sales due to over priced, end sale structure. If the pricing was in a generalised margin and foreseen as good value to the market place then turnover would be forthcoming ie a profit. Maybe not the killing they thought they were going to make but nevertheless a profit.
Milk the cow slowly and it will give you a return all it's life. Rip it's teets off and ......... well you know the rest.
That chart assumes you believe the official measure of inflation (CPI) to be "real".
Just as the chart you showed "House Price Index" was adjusted to "House Real Price Index" after adjusting for inflation, there should be a third adjusted chart showing returns "House Real-Real Price Index" after adjusted for real inflation!
Hell, even the RBA is rubbishing CPI these days
http://www.news.com.au/business/rba-says-cpi-data-not-representative/story-e6frfm1i-1225842175839
I advise everyone to look at that article, as it has a chart showing Australian "underlying inflation" - you can see the RBA has failed to keep within their "target rate" since Sep 2007 if you use underlying inflation. Even after six-in-a-row panic rate cuts in 2008. Readers are encouraged to think and make up their own minds why the RBA seems to lack the monetary policy controls to keep inflation within their target band.
As you can see if we were adjusting your stubbornmule chart for "real inflation" then "real real" returns on housing would be even lower than 2.1%. FHOG is probably a very good explanation as to why 2008/2009 capital gains could be less than 0 after adjusted for inflation!
Housing finance up 1.9% in may for owner occupied rose for the first time in months....
hello,
exactly Sinner, and for over 6yrs now at ASF and the bloggo-sphere people have been carrying-on about house prices
why are you and others so interested in an asset that performs so poorly?
surely all the research you have conducted makes you put a line through property as its only returning 2.1%/yr,
i bought and settled a month ago, got finance from the CBA
what a surprise, someone has mentioned uncertainty
thankyou
associate professor robots
maybe the real issue is wages, but looking at most people i see working their "worth" is about right
thankyou
associate professor robots
hello
no-one here at ASF ramps property explod,
plenty like Bigdog, just putting in a daily or weekly report
thankyou
associate professor robots
I thought that the real issue (as spruiked by cheerleaders on ASF) was that there a shortage of properties. Shouldn't that mean 100% clearance rates?
Supply and demand does not necessarily mean vendors price is equivalent to purchasers price therefore equalling 100% clearance rates.
There were 528 auctions reported this weekend with a total of 361 selling and 167 being passed in, 96 of those on a vendors bid. The clearance rate from this weekend’s auctions is 68 per cent. This weekend last year saw 293 auctions reported and a clearance rate of 85%. Next weekend the REIV expects 590 auctions.
Enzo Raimondo
CEO, REIV
But it does mean that the disparity between what vendor's want and prospective purchasers are willing to pay.
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