auction results for today, page-11

Auctions fall despite grant boost
Chris Vedelago and Peter Weekes
October 19, 2008
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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.