Buyers get Nervous

Article courtesy of The team at Jason Andrew 05 May 2014.

The media was full of “boom over” property reports last week, with experts calling an official end to the recent period of market buoyancy. Buyers already nervous over the strict reforms expected in the looming Federal budget appeared to heed the call, with a significant drop in buyer activity around the country and a corresponding drop in the national auction clearance rate to 43%.

According to the latest report from Australian Property Monitors, even some suburbs in the country’s strongest market of Sydney have failed to experience any boom over the past year. The city’s ten poorest performing areas all experienced less than 7% price growth, including previously strong performers like Randwick, Bellevue Hill and Hunters Hill.

News Limited reported overall Sydney and Melbourne growth year-to-date in 2014 at 5.1%, while Adelaide prices have grown by 3.3% and Brisbane 0.2%. Perth values are down 0.6%.

With the next Reserve Bank announcement due tomorrow, the official cash rate is expected to remain level and according to the commentators, likely to remain so for the next few months. But even the inducement of historically low interest rates is failing to entice buyers who are increasingly cautious about overpaying in the face of an uncertain future.

For sellers who are serious about transacting, the formulation of a realistic reserve price is more critical than ever to create a competitive environment and hence, achieve the best possible outcome.

All the best