Loan pre-approvals by banks can be confusing. They aren't a rubber stamp to buy whatever you want, but some buyers are being a little too cautious.
That was the winter that was
A comparison of Melbourne auction numbers and clearance rates from the REIV for the 13 weeks of winter 2011 and winter 2010 reveals some interesting insights. Auction numbers were significantly down in winter 2011 compared to 12 months ago. There were around 480 auctions a week this winter, compared to around 590 in winter 2010, a reduction of nearly 20 per cent.
Vendors also struggled to get buyers over the line come auction day (click Next Image to see chart). The clearance rate for auctions was nearly 70% in winter 2010, but just over 56% in winter 2011.
Market caution is now a well-entrenched trend so lower auction volumes are likely to continue though the spring 2011 market. Vendors will have to meet the market with realistic pricing if they are to avoid being passed in and having to take their chances in the subsequent negotiations. As for buyers, they are still in the box seat.