Paul Castran - CEO - Castran Gilbert

MELBOURNE’s auction market had its highest clearance rate over the weekend since the end of the property boom in December 2007.

Of 452 properties up for auction, 83 per cent sold and 77 properties passed in!

However, the number of properties for auction was 126 fewer than at the same time last year!

The CEO of Real Estate Institute of Victoria attributed the high clearance rate to the extension of the first-home buyer’s grant announced in last week’s federal Budget, combined with low interest rates and an increase in investor numbers.

“It’s off a low base. There were not a lot of auctions,” Mr Raimondo said.

The part of the market performing really well is priced at or below the medium of about $410,000.

The next two weeks we expect to see just under 1300 auctions, which is a very high number of auctions at this time of the year.

“I expect the clearance rate to remain high until the September 30 when the full first-home owner’s boost will be phased out.”

Flat and apartment clearances were also very strong: 90 per cent of 136 properties at auction sold.

The latest residential land report from the Housing Industry Association revealed Melbourne’s median land price grew 0.7 per cent in the December quarter to a record $152,000.

The HIA-RP Data residential land report showed the price of land in Melbourne was up 4.8 per cent over the year.

The median land price in regional Victoria fell 2.8%in the December quarter to $97,250, the lowest price since mid-2007!

Property investors should start planning right now to take advantage of the next upturn in the property cycle, according to quantity surveying firm Asset Economics.

“Property booms never last but neither do property busts.”

In taking advantage of the next boom, investors need to make sure they’re buying for long-term capital growth remembering to take in account the ripple effect.

As the next property cycle comes around, it‘ll be the most desirable as well as sought-after areas that start growing first, and these are generally the most affluent suburbs too.

From there, capital growth begins its ripple outwards!!

Two of Australia’s biggest residential developers have called the bottom of the housing market, saying some life should return to the troubled sector next year.

Billionaire apartment developer Harry Triguboff and the listed Mirvac Group said signs of growth in demand were emerging.
It runs counter to a report this week from AMP chief economist Shane Oliver, who said Australia’s overvalued house prices could fall 10-15 per cent next year.
Mr Triguboff, founder and owner of the country’s biggest apartment builder Meriton, completed and sold 1000 apartments this year, well down on the 3000 a year built during the boom in 2002, The Weekend Australian reports.
Next year, he hopes to build 1500.
While Mr Triguboff said he “always met the market” when conditions cooled, he expected Meriton’s prices to rise 10 per cent next year underpinned by the government stimulus of rising rents and the lack of supply.
“I don’t think we have to worry, we have such help from the Government,” he said, referring to Canberra’s $14,000 grant for established homes and $21,000 for newly constructed homes announced in October.
“Petrol has come down, income tax has come down. Some people will lose their jobs, sure, but let’s talk about the ones who won’t.”
AMP’s Mr Oliver said an increase in unemployment posed a significant threat to house prices. AMP forecasts the jobless rate will rise from 4.3 per cent to 6.5 per cent in 2010.
Mirvac Group chairman James MacKenzie said the company was starting to see “what we hope are early signs that the residential market, and consequent demand for Mirvac product, being stimulated”, though he was cautious, given the state of the market.
He also cited the Federal Government’s boost to the first home-buyers grant, the cuts in interest rates and measures in the NSW Government’s mini-budget as factors.

Read the full article from Jessica Irvine and Turi Condon of Perth Now here:

http://www.realestate.com.au/doc/Resources/News/market-going-up.htm

Paul Castran