Skip to content Skip to main navigation

Business

A consulting company that trust its employees to do great work

How bad is the real estate market?

By johnboy 17 August 2008 39

The ABC reports that every single house auctioned over the weekend failed to find a buyer.

    “Home buyers were thin on the ground in Canberra over the weekend with all 21 properties on offer at local auctions reportedly being passed in.”

A blip? or part of a larger trend?


What’s Your opinion?


Please login to post your comments, or connect with
39 Responses to
How bad is the real estate market?
Filter
Showing only Website comments
Order
Newest to Oldest
Oldest to Newst

@Jazz – as it transpires, yes I think its a sale by tender.

What was said to me over the phone (silent auction) was more appropriately (legally) worded in the email, which was to submit a written bid of our highest offer, which would then be considered I presume by the seller.

@peterh – the agency is LJ Hooker. You can exercise your right to vote with your feet now forearmed with this information since it would outwardly appear that they are contravening the REI ACT code of conduct – albiet discretely and within expected boundaries of Real Estate sharkism.

Fair enough – it’s a free country!

peterh 10:11 am 19 Aug 08

VYBerlinaV8_the_one_they_all_copy said :

Why sell your house at all, is what I’m getting at. If you can arrange things so your working income isn’t paying the mortgage, why not simply keep the asset?

the plan is to move states. I don’t want the headache of managing a rental in a different state.

Why sell your house at all, is what I’m getting at. If you can arrange things so your working income isn’t paying the mortgage, why not simply keep the asset?

peterh 9:49 am 19 Aug 08

VYBerlinaV8_the_one_they_all_copy said :

Agents are an interesting bunch. I’ve never sold a house, but have dealt with some unbelievably dodgy agents when buying.

(The alternative is simply to not sell your house, but rather borrow against it purchase a yield bearing asset such as shares use the shares yield and rent from you old place to support both mortgages…)

wha?

the alternative is to engage the services of a known agent that is a family friend.

Agents are an interesting bunch. I’ve never sold a house, but have dealt with some unbelievably dodgy agents when buying.

(The alternative is simply to not sell your house, but rather borrow against it purchase a yield bearing asset such as shares use the shares yield and rent from you old place to support both mortgages…)

peterh 9:34 am 19 Aug 08

VYBerlinaV8_the_one_they_all_copy said :

So much for the low rates under Howard. We are now gonna pay for them, but he won’t be around to take the blame for his miss-management of the economy.

He paid off govt debt and improved employment and real incomes by stimulating the economy. I am no Howard lover, but to accuse his govt of economic mismanagement is laughable, I think. Of course, he also had world conditions (typically beneficial) to assist him, but he certainly didn’t bollocks things up.

The reality is that economic cycles occur over years long periods. We have just had a good one in Australia, during which house prices rose significantly. I still think it’s a mistake, though, to compare house prices to a time (say 8 years ago) when they were at the cheapest point in the cycle. Of course house prices will revert to mean value, but given our supply problems (and the insistence of many under 40’s to live ‘inner city’), it’s going to take some time. Interest rates are probably at their immediate peak, but again will take some time (ie years) to drop to significantly lower levels (although it’s worth noting that they aren’t really much above historical average anyway).

Bottom line, keep your head and let the cycle play out. If you want to afford a house, it takes work and time – house prices have risen because peoples’ ability to pay has risen. Over time it will adjust.

the problem that I can see is when i come around to selling mine, there will be the usual scramble by the agents to be the one who sells it. shame that I will deal with certain agents, and not with others….

So much for the low rates under Howard. We are now gonna pay for them, but he won’t be around to take the blame for his miss-management of the economy.

He paid off govt debt and improved employment and real incomes by stimulating the economy. I am no Howard lover, but to accuse his govt of economic mismanagement is laughable, I think. Of course, he also had world conditions (typically beneficial) to assist him, but he certainly didn’t bollocks things up.

The reality is that economic cycles occur over years long periods. We have just had a good one in Australia, during which house prices rose significantly. I still think it’s a mistake, though, to compare house prices to a time (say 8 years ago) when they were at the cheapest point in the cycle. Of course house prices will revert to mean value, but given our supply problems (and the insistence of many under 40’s to live ‘inner city’), it’s going to take some time. Interest rates are probably at their immediate peak, but again will take some time (ie years) to drop to significantly lower levels (although it’s worth noting that they aren’t really much above historical average anyway).

Bottom line, keep your head and let the cycle play out. If you want to afford a house, it takes work and time – house prices have risen because peoples’ ability to pay has risen. Over time it will adjust.

Aurelius 4:53 pm 18 Aug 08

Slightly off-topic, but if you’re the type who reads real estate listings looking for peculiar entries: check out http://lovelylisting.blogspot.com/

JC 4:37 pm 18 Aug 08

2604 said :

The biggest contributor to rising house prices is people’s ability to borrow more and more money.

Now, people’s ability to borrow has been constrained by (a) higher interest rates pushing up minimum loan repayments, and (b) banks taking fewer risks with whom they lend to. There is a lot of very average housing stock sitting on the market with no-one willing or able to purchase it at the inflated prices of 2007.

Barring a quick drop in interest rates (of 1-2%), the market will only get moving again once vendors have accepted that they need to adjust their asking prices downwards to a level that people can afford to borrow to.

I think you are spot on, that is why I reckon prices are artifical. People borrowed to the hilt, up-sized, brough investment places which in turn forced the prices up again. The prices now are stupid hence why they need to come down. if they come down in price or come down over a few years relative to income remains to see. I reckon both are needed.

So much for the low rates under Howard. We are now gonna pay for them, but he won’t be around to take the blame for his miss-management of the economy. Letting it boom too much can be worse than letting it slow to buggery.

Jazz 3:38 pm 18 Aug 08

Mael, Are you talking about sale by tender? its kinda like a silent auction where buyers put in written bids,

Check out this form put out by fair trading for all sorts of details on what to expect

peterh 2:40 pm 18 Aug 08

Mælinar – *spoiler alert* I’ve seen S04E13 said :

An agent contacted me this morning about an enquiry on a house.

After an open day on Saturday, with 31 visitors, he has 15 requests for a condition report, and 3 buyers already offering list price.

He offered me a chance to sit in on a silent auction which was where he was at given the eagerness of purchasers.

That’s where the situation of Real Estate in Canberra is as of this morning.

Maelinar, silent auctions, I thought that contravenes the REI ACT’s code of conduct?

An agent contacted me this morning about an enquiry on a house.

After an open day on Saturday, with 31 visitors, he has 15 requests for a condition report, and 3 buyers already offering list price.

He offered me a chance to sit in on a silent auction which was where he was at given the eagerness of purchasers.

That’s where the situation of Real Estate in Canberra is as of this morning.

Deano 2:22 pm 18 Aug 08

Jazz said :

Thats absolute bollocks deano, There are very valid reasons for going to auction as i mentioned above at Comment #8, & none of those have anything to do with an agent wanting a quick sale so that they can collect a commission.

Totally agree that auctions are appropriate for unique properties but, as a real estate agent once told me, the only house that would warrant an auction based on uniqueness is the Opera House. Four bedroom brick veneer in the suburbs is not unique.

As for vendors needing a quick sale, there must have been a lot of people suddenly needing to leave Canberra over the past few years.

Jazz 1:48 pm 18 Aug 08

Deano said :

Auctions are more for the agent’s benefit than any one else’s.

Thats absolute bollocks deano, There are very valid reasons for going to auction as i mentioned above at Comment #8, & none of those have anything to do with an agent wanting a quick sale so that they can collect a commission.

Skidbladnir said :

Jazz, do you work in the real estate industry, by any chance?

No, but my wife does which gives me an insight to the process and I have been at quite a few auctions both as a buyer, spectator and vendor.

Reprobate said :

Last time I butted heads with Jazz about house auctions (him for, me against) a couple of months ago he revelaed that his nearest and dearest is in the profession.

I’m neither for, nor against Auctions. They have their uses depending on the circumstances of the vendor just like any other tool. I just dont like seeing misinformation thrown about as the basis for peoples decisions.

Reprobate 12:03 pm 18 Aug 08

“Jazz, do you work in the real estate industry, by any chance?”

Last time I butted heads with Jazz about house auctions (him for, me against) a couple of months ago he revelaed that his nearest and dearest is in the profession.

Deano 10:39 am 18 Aug 08

Jazz said :

Ant,

how is a private treaty any different? isnt that in effect a silent auction which is just over a few days/weeks rather than a shorter period and out in the open?

From an agent’s point of view, there is a big difference. With auctions the agent has a limited amount of advertising and inspections, holds the auction and can wrap the sale up and collect the commission within a couple of weeks at most. If the vendor baulks at the price offered, the agent only has to point them outside and say ‘that’s what the market is offering’.

On the other hand, with private treaty they have to advertise and hold inspections up until the house is sold, which may be one week or six months before they get paid. They also have to deal with vendors’ unrealistic expectations regarding price and rejecting quite reasonable offers. The vendor can also decide to withdraw the house from the market, in which case the agent gets nothing.

Auctions are more for the agent’s benefit than any one else’s.

Skidbladnir 10:16 am 18 Aug 08

Jazz, do you work in the real estate industry, by any chance?

Jazz 9:04 am 18 Aug 08

haha ant, what you’ve just described is a private treaty negotiation as well.

Related Articles

CBR Tweets

Sign up to our newsletter

Top
Copyright © 2018 Region Group Pty Ltd. All rights reserved.
the-riotact.com | aboutregional.com.au | b2bmagazine.com.au | thisiscanberra.com

Search across the site