auctions slump signals end of boom

As expected all starting to unfold, the boom will never hold with interest rates this high & rising:


Auctions slump signals end of boom

MELBOURNE'S rampaging property boom has finally cooled after years of soaring prices.

Auctions failed to fire yesterday and the Real Estate Institute of Victoria last night declared the market had peaked and prices were easing.

In the first big test for the market this year, some real estate agents reported clearance rates of less than 60 per cent.

The figures are well below last year's high-flying results, which consistently topped 80 per cent clearance.

Few buyers attended sales across the metropolitan area and those who did nervously sat on their hands.

Auctions in outlying suburbs were especially quiet.

Even "bargain" homes offered at foreclosure auctions failed to sell.

And many agents blamed the Reserve Bank's warning this week of a sustained wave of interest rate rises.

Despite the six consecutive interest rate rises in the past two years, the bank is still warning it must further rein in spending.

Real Estate Institute of Victoria chief Enzo Raimondo said the excitement of high capital growth was "over for this year".

"I've spoken to a lot of agents in the past few days and they are saying that things are starting to slow," he said.

At Melton West, a mortgagee sale of a six-bedroom house passed in at $200,000 -- $255,000 had been offered in November.

A MODERN four-bedroom Vermont home passed in for $800,000, despite five buyers having made earlier offers about $850,000; and
AN ALTONA North family cancelled an auction of their three-bedroom home because of a lack of interest.

At auctions across the Barry Plant network yesterday the auction clearance rate was 58 per cent. It would normally be about 70 per cent at this time of the year, Mr Plant said.

"The negative publicity in the past week (about increasing repossessions of Victorian houses) has made people a little cautious about their spending," said agent Jeffrey Anderson, of Woodards.

Houda Hameed, who withdrew her Altona North property from auction, said her house was better than others that had sold in her street.

"I just don't understand why this happened," she said.

Roxburgh Park agent Kon Balasis, of Raine & Horne, said: "Buyers are taking their foot off the accelerator a little bit."

Agents said there was a widening gap between what buyers were offering and the prices vendors hoped for.

"There has been a shift back towards the buyers," said inner northwest agent Brad Teal.

Mr Teal said this year's market was a "totally different animal" to last year's rampage.

Barry Plant Group director Barry Plant said buyers were less urgent.

"I feel it pulling back a little bit," Mr Plant said.

I do not see it roaring forward in the next three