Newspaper article The Morning Bulletin (Rockhampton, Australia)

Time for Buyers to Pick and Choose; Huge Stockpile of Listed Homes on the Market

Newspaper article The Morning Bulletin (Rockhampton, Australia)

Time for Buyers to Pick and Choose; Huge Stockpile of Listed Homes on the Market

Article excerpt

IF ever there was a time to be hard-nosed about property, it's right now.

Prices are down, and still falling, in most capital cities.

There's an enormous stockpile of listed homes to choose from. Auction clearance rates are weak. Mortgage rates are pretty favourable, historically speaking.

Buyers are certainly being given good reason to smell blood in the water.

These are the kind of conditions where Co as one property veteran told me during the 2008 GFC Co opportunistic and financially secure buyers can C[pounds sterling]pick the eyes out the marketC[yen].

Which is why I'm surprised at the number of properties that still sell for well above reserve prices when they are put under the hammer. (Sure, it's a drop in the bucket compared to a couple of years ago but it's still happening).

Each weekend The Sunday Age Domain section sends out reporters to cover six C[pounds sterling]liveC[yen] auctions.

Reviewing the dozens of properties we've covered in the last few months Co as the market has notably weakened Co it's clear that a small, but not insignificant, number of buyers are still willing to pay big prices at auction.

Often we're talking about tens of thousands of dollars above the reserve and, based on comparable sales for that kind of property in that area, arguably well above a calculated and dispassionate assessment of the property's likely market value.

Even when the action fizzles and a property passes in, some buyers end up agreeing to pay the vendor's reserve Co and sometimes even above that Co to close the deal.

Dismissive of negative median house price figures, agents and buyers' advocates say this is a classic sign of a Cysegmented market' and argue that quality property in a prime location will always sell well.

Fair enough, up to a point.

But you have to wonder why a confident buyer, with time on their side and so much stock to choose from, would allow themselves to get drawn into a competitive scenario where they pay above the odds to secure a property. …

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