Archive for May 28th, 2009

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

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

But 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 which is performing really well is priced at or below the medium of about $410,000.

“In the last 12 months that’s stayed very stable.”

Mr Raimondo expects the strong clearance rate to continue.

“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 30th of September (when the full first-home owner’s boost will be phased out).”

Flat and apartment clearances were also 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 per cent in the December quarter to $97,250, the lowest price since mid-2007.

Home buyers are flocking back to variable rate mortgages which now account for 91% of the residential lending market, their highest proportion in four months.

Mortgage broker Mortgage Choice reported in April, basic variable mortgages accounted for 48.15 per cent of all home loans approved - up nearly one per cent from March, while standard variable mortgages comprised 42.77 per cent of the market, down 1.47 per cent from March.

Basic variable loans generally have fewer loan features than a standard variable loan.

Fixed rate loans accounted for four per cent of all approvals up a percentage point from a month earlier.

Basic variable loans have been the most popular loan type for four months after overtaking standard variable for the first time in January 2009!

Rates charged on variable home loans move in line with interest rates as set by the Reserve Bank of Australia (which has successively cut its overnight cash rate since September last year to a 49-year low.

And despite interest rates being at their lowest in decades, the sensitive global and domestic economic climate is having a strong influence over loan product preferences.

Consumer conservatism with rates and fees continues to win out against loan flexibility and extra features.

Line of credit loans in April, popular with property investors, posted a fall of five per cent from the previous month.

Commitments for owner-occupied housing rose 4.9 per cent in March, seasonally adjusted, to 59,793, Australian Bureau of Statistics data showed this month.

Total housing finance by value rose 6.7 per cent in March, seasonally adjusted, to $20.688 billion, based on the latest data available.