Sales Market Review
Wednesday, October 01, 2008
We have rapidly moved into the busy Spring selling period and there has already been a few things to celebrate. We kindly welcomed a reduction in interest rates (the first in seven years) and the likelihood that more will follow. Our market analysis suggests there has been an increase in the amount of new property entering the market and there has definitely been an increase in buyer attendance at our open homes. Contrasting the positive market news was the alarmingly low volume of property that actually sold in the past 30 days. As our market summary indicates there were only 16 properties sold last month which is the lowest level of turnover in the past five years and highlights the apprehensive nature of buyers presently in the market. To put this into perspective, for the same 30 day period in 2007 there were 66 properties sold and in 2006 there were 64 sales.
This low volume of turnover is expected to change, however. The Reserve Bank's rate reduction is essentially an acknowledgement that the market has bottomed out and that activity needs to be stimulated. The first reduction in rates is not the silver bullet that will dramatically change the landscape of our market, but it can be viewed as a genuine turning point. Many market forecasters predict rates will decline by a further 1.25% by the end of 2009. In our view they need to be reduced by at least this amount before we will move into a growth cycle. The fairly lacklustre year for the property market and our economy rocked buyer confidence. However we are starting to witness a change of sentiment from buyers who have been sitting on the sidelines and who now appear to be more active and prepared to purchase should the right property become available. We’re not seeing an aggressive return from buyers but rather a slow turning of their mindset and a preparedness to negotiate and purchase. This sentiment has definitely been missing over the past several months and is evidenced in the results of our market summary.
The correct pricing of property is also playing a role in turning the fortune of the market as agents and owners are commencing new sales campaigns with prices that meet buyer expectations and market competition. This is the key to a successful sale in the market and with more property becoming available it is paramount to set the price correctly. Buyers will act swiftly on a fairly priced home but will similarly leave an overpriced listing languishing on the market. It's great to report that buyers are becoming more positive in the market and this increased activity will boost sales turnover and create additional confidence moving into 2009.
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