Green shoots appear for spring auction season

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Green shoots appear for spring auction season
Sydney has almost 600 real estate auctions scheduled this weekend. Melbourne has more than 700. The first “super Saturday” auction weekends with more than 1000 each will start in late October, but the thaw is on. Volume will be climbing. Clearance rates have held high through the winter, a product of both a hot market and momentarily-constrained supply. It's unclear if those kind of clearance rates can be sustained when the market picks up. About 30 per cent of all Melbourne homes are sold at auction, while 20 per cent of Sydney's sales are auctions, but the proportion of sales has been rising with the overall market. Read the full story here.

The Internet is still disrupting the real estate market
Sites like realestate.com.au and domain.com.au may have fired a cannonball through the traditional classified model for home sales. But they, too, are subject to being disrupted by emerging models for advertising and sale, including a move toward do-it-yourself listings and sales. A new $60 million investment fund, AirTree Ventures, is looking for ways to pick off complacent business models remaining in real estate, like cloud-based real estate management services or agent rating websites. The idea of a vendor paying thousands of dollars to list a property on a website is “ludicrous” AirTree Ventures’ fund manager Daniel Petre said. Read the full story here.

RBA says the market is amply supplied with loan money – no more for us, please
With an ample supply of mortgage finance in Australia, “any proposed policies that could further increase that supply should be subject to rigorous analysis of their costs, benefits to consumers and risks to financial stability,” the Reserve Bank of Australia said in pointed comments Wednesday. The RBA is addressing an interim financial inquiry report by former Commonwealth Bank boss David Murray calling for more competition between banks. The side-effect of some of the proposals would be an increasing bias toward home mortgage lending and increasing systemic risk, the RBA suggested. Read the full story here.

Investment strategist calls for credit rationing now, before another crash
Paul Schulte of Schulte Research International, formerly Bank of New York Mellon’s head of investment strategy for Asia Pacific, thinks banks have been too loose offering credit – particularly for real estate investors – and that constraints now will extend the housing boom later. Leverage levels have grown to be among the highest in the world, he noted at the ADC Forum’s recent Australian Leadership Retreat. The high leverage levels leave Australia vulnerable to disruption. Investors hold $413.5 billion of the nation's real estate loan portfolio, an increase of 3.3 per cent from March and 10.9 per cent ahead of the previous year. Interest-only loans made by the Big Four lenders grew 12.8 per cent. Read the full story here.
 

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