Going, Going, Not Gone?

Going, going,....

OK so there has been a slight share market correction. But to be honest I am starting to wonder how the headline writers in Australia would deal with a real catastrophe: say for example a meteorite heading straight for Sydney, the north Koreans letting off the bomb, something really bad. On the back of a little financial bad news we have headlines of “Calamity in the Markets” and “Finanical Melt Down” all because for the first time in a decade the Australian stock exchange won’t deliver double digit returns: well not positive ones anyway.

Which is my way of saying perhaps last weekend wasn’t the best time ever to put your house up for Auction! Real Estate agents in Eastern Australia weren’t going to let any small market correction stuff up their pre-paid advertising and auctioneer booking however and it seems that most went ahead as planned!

In fact all things considered the auction clearance rates weren’t too bad compared to the previous week though Melbourne’s property continued to soften. The auction clearance rate for Melbourne was 39%, compared to 49% a week before and 89% a year ago. Auctioneer Marshall Rushford was left slightly baffled after a three-bedroom family home in Elsternwick was passed in at auction:

With a shortage of properties on the market right now you’d expect a property that’s in a good area, that’s at a reasonable price, to sell”
“We had three serious bidders but there was some hesitation there. A lot of home buyers and sellers are waiting to see how the interest rate reduction will affect the market”

Well it tells me as that the buyers are smarter than the real estate agents. The main Australian banks have already dropped interest rates by a surprise 1% and the smart buyer is waiting to see how much lower they will have to go. And the house auctioned was very ordinary: original 1970’s decor - it was a classic doer-upper with potential but not a fall in love with bargain one, suspects. In could have appealed to investors, but no smart investor would buy at auction with the risk of all the up front costs for building and pest inspections going to waste if their out bid on the day.

Photo Credit OldOnLiner