The market has copped a beating in the past year but is yet to experience any real contraction in capital values. Auction clearance rates are down to 50 per cent from 70 per cent, against a long-term average of 65 per cent. Reports attribute the slowdown to interest rate rises and lagging consumer confidence arising out of regulatory uncertainty and the ominous outlook for Europe. Adrian Jones, president of the Real Estate Institute of Victoria, describes property values close to the CBD as “virtually bulletproof”. However, prestige properties in this area face a choppy outlook. “Vendors aren’t getting record prices by any stretch. They’re being forced to meet the market but the market still exists,” says Jones. In fact, persistent high prices in areas close to the CBD have seen suburbs in the northern and western suburbs grow in popularity. Yarraville, Altona, Northcote and Footscray are attracting buyer interest, particularly from first-home buyers who have staged a modest come back. Bucking the national trend, first-home buyers represent about 15 per cent, up from 12 per cent but down from 28 per cent in 2008. They are propelling a steady demand in the $500,000 to $600,000 bracket. In another sign of strength, houses on average take between one and three months to sell. “Property’s cyclical, it’ll be flat for the next six months but in 2012 will see it start to come good again – depending on consumer confidence,” Jones says.
Source: RP Data