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Tuesday, November 29, 2011

Tues Post #1: In Australia they've started blaming the buyers for "unrealistic expectations"


When we hear or see auctioneering we always think of insolvency.

But in Australia it is commonplace to put your home up for auction before giving a mandate to estate agents. The auction of houses and land is not considered as a last resort.

In the Land of Oz, over 85% of real estate is sold by auction.

And no day is more important on the Auction calandar than the last Saturday at the end of November - the last weekend of spring in the Southern Hemisphere and traditionally the most popular day to buy and sell real estate via auction.

Known as 'Super Saturday', this particular day is considered the high point of the real estate sales year and is significantly hyped.

Anticipation was keen for this year's 'Super Saturday' as property owners and real estate agents had hoped the lead-up hype would jolt what has been a lifeless market so far this year into action.

But it wasn't just property owners and real estate agents who were looking forward to 'Super Saturday'. Those hunting for real estate 'deals' were out in force.

But 'deals' of desperation were not forthcoming as the slumping Australian market is not quite at that point yet.

With clearance rates for residential properties in Sydney and Melbourne way below expectations, buyers kept a tight grip on their wallets and only about half of all homes being put to auction sold under the hammer.

It lead the Australian news to proclaim Super slow sales on real estate market's 'Super Saturday'

It shouldn't come as a surprise. With articles proclaiming that many current homeowners are facing a problem of negative equity as a result of declining Aussie real estate values, potential buyers have become vultures. Who wants to catch a falling knife?

And an interesting dynamic is developing.

The failure of last weekends 'Super Saturday' is prompting auctioneer's to blame the potential buyers.
"Buyers were being unrealistic about property prices, auctioneer Damien Cooley of Cooley Auctions said. "We're seeing a lot of cases where an agent may quote a price such as mid to high $400,000s and buyers are turning up expecting to pay in the low $400,000s. A year ago buyers would have automatically felt they had to pay five to 10% more than what was being quoted."
Oh the horror!!

But buyer aprehension is justified.

According to SQM Research, an independent property advisory and forecasting research house which specialises in providing accurate property related advice, research and data to financial institutions, property developers and real estate investors, the Aussie real estate contraction is far from over.

"The tide hasn't turned," SQM Research director Louis Christopher said. "The worst is still in front of us. There is a huge overhang of stock for the market to work through and it is going to get worse before it gets better."

I wonder how long it will take the Real Estate industry here to blame 'unrealistic buyers' when our market turns and the bidding wars become a distant memory?

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1 comment:

  1. Of course it's the buyers fault. That's why Walmart should be banned. How dare people want to pay less!!

    ReplyDelete