After the release of the median property price drop for May of 1.7% the talk is all bubble and dramatic price drops in Australia. Shane Oliver of AMP states in The Australian that apartment prices in Melbourne will drop 15-20%. Surely he is talking about high rise apartments and we would agree with him, which could mean in 12 months or so high rises will represent excellent buying at below cost.
Our experience in the housing market is that demand is still very strong. For example there are usually 4 or 5 buyers at most auctions and probably more who believed the “quote range” and attended with the hope they would be in the mix. Until such time as the number of bidders is reduced to 1 or 0, prices will rise. An article in Saturday’s Weekend Australian told of the frustration of a buyer who been attending open homes and auctions to find Agent price indications greatly exceeded. This problem is common.
As Buyers Agents we have techniques to overcome this. One common way is to forensically question the Agent to obtain a price closer to the “real price”. Bidding methods are another way to be successful at auction. However there is no way to counter emotion from some buyers under auction conditions. Property is still a great investment as long as buyers take a long term view.