Flood of property listings to hit Melbourne market

[muppet]

Flood of property listings to hit Melbourne market

CHRIS ZAPPONE
May 31, 2010
Rising interest rates to change market behaviour: REIV
The Melbourne property market is bracing for a record number of properties coming on to the market over the next fortnight.
The Real Estate Institute of Victoria is predicting 1210 auction listings over the next two weeks, the most on record for that period, as the impact of the Reserve Bank's six rate rises in eight months weighs on buyer behaviour.
"The six interest rate rises totalling 1.5 per cent are now impacting on the market," said REIV CEO Enzo Raimondo. "Higher stock levels have the impact of providing buyers with more opportunity and reducing pressure on prices."
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A 50 per cent increase of new home listings expected over the next three weekends comes as auction clearance rates begin to falter on pricier home loans and weaker buyer confidence.
Global and local sharemarkets have experienced steep drops over the past month, as investors fear Europe's debt crisis could derail global growth.
Melbourne's clearance rate slowed to 73 per cent this weekend, compared to 82 per cent the same weekend last year, REIV said.
Australian Property Monitors produced a lower weekly gauge of the market's strength. APM said the Sydney auction clearance rate dropped to 59.6 per cent this weekend from 61.8 per cent the weekend before.

In Melbourne, the same figure dropped to 66.1 per cent from 68.9 per cent in the same period. APM is owned by Fairfax.
"It appears the market is moving towards a more sustainable position than it was in the last quarter of 2009 and the first few months of this year," said Mr Raimondo.
Real estate analysts have tipped the home prices growth to moderate after rocketing up 20 per cent in the year to March, on a strong economy, a chronic shortage of available houses, and a growing population.
Home loans, however, have slumped for the six months to March, to hit a nine-year low, as rising interest rates and the expiration of last year's First Home Owners Grant boost cut slowed the market's momentum.
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[LKSteve]

Melbourne property

It will be interesting to see what happens to the property market here in Melbourne. My wife & I recently arrived and spent almost two weeks looking at properties for rent. The quality varies greatly, in the end we ran out of time & grabbed a 3 bedroom house in the northern suburbs for $315 per week. We have a 6 month lease and will almost certainly be in the market to buy when the lease expires. We need some earnings history to qualify for a home loan. Six months will suffice. Yes, there appears to have been a big run-up in prices here but this is directly linked to the level of economic activity in the city and the number of people arriving in the area. There are abundant job opportunities here and the city offers an attractive lifestyle. In my view price growth will moderate but the market is relatively safe, propped up by real economic growth & immigration. This differs from the New Zealand market which has 'investors' propping up a bubble which is quite simply unsustainable. Where is the economic activity & population growth in New Zealand to justify prices? I would buy into the Melbourne market, but not into New Zealand.