A feature of the current market is low sales volumes.
This is obvious when auction volumes are compared. Until the grand final weekend, there had been 18,433 auctions this year, with 11,132 – or 60.4 per cent – selling under auction conditions.
This compares to the 22,247 auctions held up until the same time last year, when the clearance rate of 60.6 per cent meant 13,476 sold.
In 2010, when effective demand was much stronger, there had been 23,820 auctions and a clearance rate of 76.8 per cent.
From an overall perspective, the volume of sales by auction is down 17 per cent on this time last year and 39 per cent on this time in 2010.
A prime factor influencing this is an increase in the propensity of people to save rather than spend due to low levels of consumer confidence. This is reflected in the Victorian government data comparing the number of new mortgages with those discharged.
In August there were 326 fewer new mortgages taken than discharged. This has been the case for the past two years, essentially since just after the market peaked in 2010. This compares to the 10-year average, which was 498 more new mortgages than discharges.
The combination of these factors will act to prevent any substantial price growth in the short term, and continue to provide buyers with excellent conditions.
Enzo Raimondo, chief executive REIV
This story Administrator ready to work first appeared on Nanjing Night Net.