Auctions fall despite grant boost Chris Vedelago and Peter Weekes October 19, 2008 Page 1 of 2 | Single Page View MELBOURNE'S property market yesterday suffered its worst day in at least four years, despite yesterday being the first auction day when prospective buyers had access to the increased first-home buyers grant.
The attraction of the $14,000 grant for an existing house was not enough to stop clearance rates from collapsing by a staggering 6% yesterday - the worst result since separate records for Saturday sales have been kept. It follows another 5% fall last weekend.
Real Estate Institute of Victoria chief executive Enzo Raimondo said: "If we don't see an improvement within the next couple of weeks we can assume things will continue like this for a while yet."
As proof of just how difficult it is to read the volatile market, REIV president Neil Laws had earlier predicted a first-home-buyer-led rebound this weekend.
The collapse in sales came despite the Rudd Government's $10.4 billion economic rescue package, which includes a doubling of the first home buyers grant to $14,000, and an additional $7000 for those who want to build.
When announcing the unprecedented property rescue package last week, Prime Minister Kevin Rudd said its aim was to put a floor under the market where most Australians invest their wealth.
The decision came after some economists predicted prices could fall by as much as 40%.
Agents yesterday said first home buyers - who comprise up to 20% of the market - were back in bigger numbers, but remained wary of bidding.
"They only got the bonus a few days ago - it's too much to think they will come out of the block at 100 miles an hour," said Scott McElroy, director of Hocking Stuart.
"The extra $7000 doesn't make buying a home any less of a major investment, so people are going to take their time."
Clearance rates for houses in the south-east and north-east of Melbourne were particularly hammered, down 15% to 43% and 9% to 64% respectively over the past week. This compares with clearance rates of 82% and 83% for this time last year.
