Market Ends On High Note After A Year Of Big Changes
The Age
Monday December 20, 2004
As the last gavel fell before Christmas, agents reflected on a close escape from what, earlier in the year, looked like being a particularly dismal 12 months. Fears has been focused on changes to the auction system, the property boom ending and expected interest rate rises all threatening to blow Melbourne's real estate market to pieces.
With constant rumours of interest rate rises and plummeting house prices, many agents finished the year with a sigh of relief, but some pundits have suggested 2004 was merely the calm before the storm.Hocking Stuart founder Greg Hocking said the market finished the year "on a much better note than it started". He said fears of interest rate rises had faded by mid-year and, overall, the outlook was good for housing. "Unemployment is low, interest rates are still historically low and, if they do go up, it is only going to be in quarter of 1 per cent leaps."He said interest rates were moving in "a very low range" and first home buyers were still getting support from State and Federal Government. Mr Hocking said prices had plateaued, which meant stability for buyers. His firm had 44 auctions on the weekend with 29 sold, including three million-dollar plus properties. Land economist Gil Williams, of The Property Advisory, an independent service, said 2004 had not been as bad as predicted, but he suggested that 2005 and beyond were likely to bring dramatic price falls. "Interest rates can't stay where they are now," he said. "US interest rates have gone up a few cogs so we have to move up in the new year."Mr Williams said the property market was now at a different part of a predictable cycle and after seven years of solid growth was moving into three-to-five years of flat growth or decline."I think across the board there will be a 15-20 per cent decline in property prices." he said. "Some areas will hold up, but only those with high-demand schools." Mr Williams said the decline of the apartment market, particularly in areas of heavy oversupply such as Docklands, could have a detrimental effect on the wider housing market."When those apartments are finished and buyers must settle, banks may be asking for 30 per cent equity and the property will be devalued (on what the buyer had committed to pay some years earlier)," he said. "People may have to sell their own homes to cover their investment." But one person's nightmare investment is another's good buying opportunity and Mr Williams said mid-2005 could be "a wonderful time to buy an apartment if you're a counter-cyclical type of person".Gary Peer, of Gary Peer and Associates, said 2004 was a year of change - including changes to the auction system, interest rates and prices. It had been a poor year in terms of the numbers of properties sold but recent months "reinforced the strength of the auction system", he said.LISTINGSWeekend 408Yesterday 12Last Sunday 42This weekend last month 647This weekend last year 360CLEARANCE RATESWeekend 59 per centYesterday 58 per centLast Sunday 60 per centThis weekend last month 45 per centThis weekend last year 57 per centTOP 5 HOUSES1. 9 Selborne Road, Toorak $1,831,0002. 4 Peacock Street, Brighton $1,640,0003. 14 Glyndebourne Avenue, Toorak $1,350,0004. 64 Well Street, Brighton $1,350,0005. 565-567 The Boulevard, Ivanhoe East $1,250,000TOP 5 BARGAIN HOUSES1. 19 Leckie Drive, St Albans $140,5002. 116 Pakenham Street, Echuca $189,0003. 60 Ormond Road, Geelong East $195,0004. 3 Derrick Street, Lalor $216,0005. 15 Ball Street, Sunshine North $222,500TOP 5 APARTMENTS1. 704/469 St Kilda Road, Melbourne $865,0002. 3/17 Scott Grove, Glen Iris $701,0003. 9 Llewellyn Street, Beaumaris $665,0004. 6/315 Beach Road, Black Rock $640,0005. 41/11 Marne Street, South Yarra $631,000TOP 5 BARGAIN APARTMENTS1. 14/35 Kingsville Street, Footscray West $117,5002. 1/33A Brownfield Street, Mordialloc $170,0003. 9/41 Napier Street, Fitzroy $170,0004. 3/12 View Street, Reservoir $172,5005. 4/182 Barkly Street, Fitzroy North $173,500
© 2004 The Age