Does the low auction turnout signal a housing problem?

By Gerv Tacadena

Does the low auction turnout mean a housing market problem?

Housing auctions over the past weeks have not been as lively and as crowded as before, reflecting the general disinterest of home buyers across Australia.

While the preliminary figures show a 50.9% growth, Australia's actual clearance rate is expected to drop to below 50% despite recording the highest volume of homes put in auction since March. Should this be the case, it will be the fifth consecutive week of sub-50% clearance rates in Australia.

PropertyDuo's Greville Pabst told Australian Broker that the current market conditions actually present an opportunity for buyers. He said property seekers will be able to use the lack of competition to take charge of the negotiating table.

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"I have been to auctions where the auctioneer is the only one there, so this is a perfect time for buyers to negotiate hard. I wasn’t going to put in money unnecessarily and in these scenarios, we can get a very good result because you can negotiate harder in this market," he said.

For Pabst, the low clearance rate does not necessarily translate to a property problem.

"We don’t have a property problem. We have a credit problem. That’s the issue," he noted.

"I’ve got no shortage of people that want to buy property, it’s just at the moment it’s very hard for them to get a loan so that’s the issue right not, it’s not property. The fundamentals of property are as strong as ever.”

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