Due to the financial turmoil middle and high-end owners have avoided listing their properties and subsequently home sales have plummeted.
The Australian reported that although the proportion of auctioned properties being sold continued to improve, the property volumes reveal a grimmer picture.
In Sydney the auction clearance rate was 63 per cent, up from 47 per cent at the same time last year. But the number of properties sold decreased from 229 last year to just 127 over the weekend.
Meanwhile in Melbourne the auction clearance rate remained steady at 66 per cent but the number of properties listed for sale crashed from 1265 last year to just 396 over the weekend.
In Brisbane and Adelaide, most of the properties were sold privately with clearance rates & listed properties both taking a dive.
In Adelaide only 25 properties were put up for auction compared with 108 for the same time last year, with eight auction results yet to be reported, 17 properties had already been passed in.
In Brisbane only 38 properties were placed on the market compared with 115 for the same weekend last year.
Head of the Real Estate Institute of Victoria Enzo Raimondo stated that it was the decline in properties that were available for sale that had driven the recovery in clearance rates, and that there had been a decrease in transactions right across the board. He went on further to state that home owners were unwilling to sell unless they were forced to, and that there had been an increase in activity in the lower end of the market, and that the median to higher end where most of the action usually took place had slowed down to almost nothing.
Louis Christopher SQM'S Research Managing director stated that first-home buyers had boosted lower-end sales, but he warned them not to rush into the market because prices were likely to drop. Mr. Christopher went on further to say that it was not a wise move for consumers to rush out to buy a home just because of the first home buyers grant.
Research from the Market Intelligence Strategy Centre has shown that despite the slowdown in sales the home lending market had proved to be far more active than official data suggested. The ABS data showed a 20 per cent fall in the December quarter residential building approvals, seasonally adjusted, while the value of owner occupied housing finance rose 3.49 per cent.
Mr. Raimondo stated that if the unemployment rate steadied and confidence was restored into the economy, then the market would see an upturn in the spring quarter. But if the financial crisis worsened and unemployment was to rise then it would put a real damper on the market.