Kincella, the current number of private sales show how much the market is STRUGGLING!
Less people are deciding to sell by auction in comparison to previous years, but the number of houses listed for sale are up in comparison to previous years.
That means that private sales each week should go UP, but they're not. They really should be tracking upwards solidly now given that we're in the third month of the Spring selling season. Look at the graph above there's less private sales now than at the start of spring.
Total sales volumes are abysmal for this time of year, it doesn't matter whether it be by auction or private sale, houses simply aren't selling anywhere near the rate of previous years. Remember the billion dollar weekends? It's barely selling half of that now, yet prices are up 20% plus since then. If you do the math there the drop in the number of houses sold is huge.
On top of this there is a truck load of houses for sale, buyers are spoilt for choice and still aren't buying. These houses were being put up for rent, but now the vacancy rates are at 3% and now they can't even rent them out either. There's no place for these houses to hide now.
I could point you again to the credit aggregates that indicate there is no where near enough money floating around to boost sales volumes. It's going to take a big cut in interest rates or another buyers boost to get the enough money into the market to clear the glut at these prices.
Failing that, prices are going to have to continue to drop. I'm not expecting a 40% fall over 12 months or anything like that, but failing massive economic shocks I think that next year is going to be much the same as 2011 for melbourne.
