Quarterly Property Market Update – July 2022
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Based on Reported Auction Results*
Auction Success Rates Soften With Interest Rate IncreasesIt would come as no surprise that the home property market has slowed down somewhat. Activity following interest rate rises and the general world environment of recent months sees fewer buyers competing for property. We note in our own purchasing on behalf of clients, a clear change in “how we play the game”, both with auctions and private sale negotiations. From a respectable success rate at auction of high 60’s to low 70’s% in the First Quarter of the year, this rate has now declined into the high 50’s% area. The shift is quite noticeable. This is now an environment where prices are beginning to trend down … Inevitably, the questions asked by home buyers and sellers are predictably for how long and how far (down) might this emerging trend continue? Nobody can answer these questions without knowledge of how high interest rates will go and what will be the overall state of the economy in coming months and years. Even then, real estate price movements are a “guesstimation”. This is particularly so given a number of other factors at play currently. For example, our regular inflow of residents from overseas has been stopped for over two years. Will that resume soon and what level of effect might it have on values, when it does? We are all aware that mortgage rates on home loans are still at historic lows and that they are likely to continue rising to some extent. Is it better to buy sooner for low interest rates, or wait in the hope of lower prices? We feel history favours an environment for softening of values for a period to come, because interest rates appear likely to rise further. Yet, we are also cautious with this opinion as interest rate rises may not rise as high as some expect. The world it appears, cannot afford interest rates that are too elevated and so may not have the appetite to raise them excessively. As with every similar period in history along the real estate road, the long term view is the best view. Your home is an asset of unequalled importance. If you own one, that is the most important thing. It is an asset of great value and a roof over your head. As long as the purchase is affordable to the buyer, time invariably takes care of the rest. Property price slumps are always followed by property value rises. We are here to help if you would like assistance. Bruce Renowden To View Our TouTube Channel: https://www.youtube.com/channel/UCOq7OeGN5hqBXM6QbGgfRSw
For assistance in: Auction Bidding
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