Keeping watch

Keeping watch

Whilst many are watching the clearance rates with the same intensity, as an AMP shareholder follows the decline of his/her investment, there is much happening behind the scenes, as some agents embark on their very own game of ‘trading places’. The auction sales are just part of the equation, and many forget that some vendors and purchasers for that matter, prefer to trade quietly. If you look at all the record sale prices, the majority were achieved by surreptitious negotiation, and this will only increase further as agencies continue to work the Internet, and build greater and more effective databases. One of the greatest attributes of the property market is the diversity of options that it offers, namely the different methods of marketing. Whilst it can be observed that one method is not working well i.e. auctions, it should not however be construed that private treaty is suffering also. For the record, we had our first auction this week and we maintained a 100% clearance rate, which was an excellent result, one from one!

The greatest problem with the auction market is actually not the market but the agents. One of the reasons why Mosman had the worst clearance rates in Sydney last year was due entirely to a few agents who stockpiled the market. This disease is usually attributed to a competition to determine who has the most pages in The Mosman Daily. For some, this can only eventuate by telling the vendor the highest price in order to win the listing. The problem then is that the agent has very little chance of bringing the vendor’s price expectation down in a four-week selling period. Already this year, we are seeing the first signs of this happening again, so I will be closely monitoring a few of the local agents’ individual clearance rates.

The figures supporting the real estate industry keep pouring in, with the average Sydney house price climbing to $450,000, which represents a 29% increase in just 365 days. The Reserve Bank of Australia released its February 2003 report on the state of the housing market, which makes very interesting reading. Figures just released by The Real Estate Institute of NSW showed that during 2002, NSW recorded the highest volume of property sales on record. In NSW over the year there were 131,318 sales of houses, units and land. According to The Real Estate Institute of NSW figures, there were 112,803 sales in 2001. This represents an increase in sales of over 14% in 2002.

These excellent figures actually contradict the market with very few properties being offered at the moment, which explains some results of late. It very much seems that the market will probably not hit full swing until after Easter which, once again, is a first for our industry.

Congratulations to Domain.com for being appointed to look after the Richardson & Wrench networks websites. We certainly have being reaping the rewards from our association with www.domain.com.au and it is great to see that our other offices will benefit from this association. Cheers and clink ^__^

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