---The Real Estate Institute of Victoria (REIV) announced today:
?The Clearance rate this weekend is 61 per cent, compared to last weekends 59 per cent.
?There were 836 auctions reported this weekend, of which a total of 508 sold and 328 were passed in, 210 of those on a vendors bid.?
Funnily enough, last week the REIV said that ?920 [auctions] expected next weekend??
Which tells you that roughly 10% of the auctions that were supposed to take place this weekend didn?t. Or if they did, the real estate agents don?t want to tell you about them.
In other words, rather than a clearance rate of 61%, you?re looking at a clearance rate closer to 55%. And that?s for Melbourne which is supposed to be the housing auction capital of Australia.
And if you look at the handy chronology of auction results and previews on the Castran Gilbert Real Estate website, you can see how the number of actual auctions taking place each weekend is becoming significantly less than the number predicted the week before.
The trend is telling you that more and more properties are going up for sale, but fewer and fewer are being sold.
You can expect this to get worse as sellers become ever more desperate to flog off their over-leveraged properties? and so much for the property shortage, the REIV says, ?over 1000 auctions expected for each of the next three weekends and buyers are more cautious in light of the banks decisions to increase rates above the decision of the RBA.?
The spruikers wouldn?t be worried would they? Of course they are. They?re petrified in fact.
Our old pal Michael Pascoe over at The Age is clearly on edge at the number of housing bubble stories doing the rounds. For instance, he makes the typical mainstream mistake of assuming higher income earners are safe from mortgage stress. He writes:
?As for the National Centre for Social and Economic Modelling?s ?mortgage pressure tipping point? of 30 per cent of disposable income going on repayments, it means little without consideration of how large that disposable income might be and the other demands on income. If a household takes home $150,000 and chooses to spend $50,000 of it on buying a roof, living on $100,000 is hardly any form of absolute ?pressure?.?
Really? Obviously Mr. Pascoe doesn?t appreciate that most people tend to live up to and even beyond their means. Which is rather the point about why excessive borrowing is having the impact it is.
Those with $150,000 of disposable income are likely to have the lifestyle of someone with a $200,000 income, just as a $50,000 income lives the life of someone with a $70,000 income ? hence the reliance on debt Michael!
Besides, he shouldn?t forget that most of the newbie borrowers, sucked in by the first home buyers bribe are forking out 50%, 60% or more of their income on mortgage repayments.
