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ACT real eastate slowing down ?

By gabrukhan - 20 March 2008 22

Just returning from a property auctions evening where only about a fifth were sold, the rest passed in, with quite a few not even attracting a single bid.  A very stark contrast to one held just last month when everything on offer was lapped up after very brisk bidding.

Is this just a minor pre-easter hiccup or is the ACT property market finally slowing down ?  Maybe this has a ray of hope for first home buyers.

What’s Your opinion?

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22 Responses to
ACT real eastate slowing down ?
boomacat 6:58 pm 20 Mar 08

Gentlemen invest in the stockmarket, not residential property.

regularbrowse 6:22 pm 20 Mar 08

I agree with “thetruth” the ACT housing slow down will be sped up by public service cutbacks, just as it was in 1997-98 after Howard Govt came to power. This time, the additional financial pressure for house prices to stagnate or fall will be the increasing cost of borrowing (thanks to the credit crunch) and the large numbers of baby boomers who will downsize and try to buy their dream townhouse on the coast. But if those boomers invested their super funds with the share market in its current volatile state, well… they might just be moving in with their 30-something kids for their twilight years.

thetruth 1:24 pm 20 Mar 08

We haven’t seen this level of interest rate since about 1997 when the average house price in Canberra was $140k (compared with $460k now). Wages (gross) have increased by about 50% (my guesstimate) over that period which make it equivalent to purchasing a $210k house.

Now there are a number of other factors so I am not suggesting that this is the real value of real estate, but it shows how sensitive folks are going to be when the double whammy of interest rate rises and slowing growth hit (we can feel more comfortable about borrowing if we know our salaries are going up through growth (but Rudd has a deliberate policy of making working families hurt to stop borrowing and stop spending)

Holden Caulfield 12:37 pm 20 Mar 08

I don’t know what to think. I’ll wait for pottsy to tell us what’s really going on.

ant 12:10 pm 20 Mar 08

Interesting facts and commentary, Thetruth. I wonder if that angry person from teh Kambah golf course estate ever managed to flog their house?

The post-election APS spending cuts would have had significant flow-on effects right through our economy, and also they’ve introduced a feeling of “more to come”. There’s something on the front of Teh Australian today about Defence not hiring civilian staff from outside the APS, which is interesting. The Federal Budget will see some very big spending cuts, there’s bound to be whole programs going, and possibly bits of agencies, too. Again this flows on outside the APS.

Interesting to see how it pans out. I don’t expect we’ll ever see $50k units in Qbn again, however.

thetruth 11:23 am 20 Mar 08

still siting waiting watching …. the budget is the last of the three stings for Canberra (that will take a longer time to work through)after the election of the Rudd Government and interest rates… in the September quarter about 850 more people left Canberra than arrived from interstate (so much for the live in Canberra campaign). While the Sept quarter is the traditional “leaving” quarter – I expect that trend to continue. Canberra’s population is only rising because of babies (they don’t buy houses for a while).

Then will come the ACT budget cutbacks after the ACT election (because of the impact of stockmarket returns – why they are still included in the budget I don’t know – and the fall in land values (both for rates and sales) and THEN the growth in GST revenues will fall due to slowing economic growth. Add to that the ACT purchasing freeze around the actual election. THEN it will all start biting in time for the next purchase freeze for the early commonwealth election called in late 2009 or early 2010.

Overall – the slow down in Canberra will be at least for the next 30 odd months – so those that sell now will do better than those that sell in 10 months time.

BTW – add to that the long term PS retirement tsunami that will hit in about 2011 as the peak of the babyboomers hit the magic 55 which will result in a rapid increase in outward migration.

Mike Crowther 10:33 am 20 Mar 08

Not bidding and hoping to pick up a passed in property with an after auction offer is a buyers tactic. You’ll find many properties passed in, sell the following week this way.
The risk of this method is you will miss out on the property if someone does bid on it. This only matters of course if it’s your ‘dream home’. If its for an investment, temporary or a step to somewhere else, it’s a good method.

Mælinar 10:32 am 20 Mar 08

*ahem* I can do beer though.

Mælinar 10:31 am 20 Mar 08

I’m no real estate troll.

VYBerlinaV8_the_one_ 10:29 am 20 Mar 08

Dunno about the trolls, but I’d say I’m already up for a beer!

S4anta 10:15 am 20 Mar 08

well you have arrived matey!
Have a beer for me this arvo!

Mælinar 10:05 am 20 Mar 08

Oh god. Are you asking for the trolls to come out ?

VYBerlinaV8_the_one_ 10:04 am 20 Mar 08

Having plenty of cash, and being able to retain sensible LVRs are essential for longer term success in property investment. Hocking up to the eyeballs to buy an investment property in the hope of rapid growth is a recipe for disaster.

S4anta 9:51 am 20 Mar 08

I would say that is an awesome idea, however just dont go in too hard, as we are in for a rough ride of the next 10-18 months where the market can still take a couple of sharp dives, facilitating a banks size 10 up the pooper if you run out of cash.

VYBerlinaV8_the_one_ 9:01 am 20 Mar 08

I’d say parts of the market are definitely slowing down. Of course, there will always be properties that continue to perform well in terms of growth, but in a stagnating market the number and type of such properties narrows. If anything, now is a good time to go hunting for bargains. I’ll certainly be looking to buy later this year.

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