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http://www.heraldsun.com.au/news/more-news/property-prices-tipped-to-fall-5-per-... Quote:Property prices tipped to fall 5 per cent amid bulging market
VENDORS face a long, tough winter as buyers continue to keep their hands in their pockets at auctions.
A hefty 780 properties were scheduled to go under the hammer yesterday, with the state recording a clearance rate of 59 per cent.
With some 91 auction results yet to be lodged with the Real Estate Institute of Victoria, that figure is all but sure to fall throughout the week.
The state's clearance rate, which provides a real-time snapshot of the health of the market, has averaged 60 per cent since the start of the year.
A balanced market is between 65 and 75 per cent.
Sales volume is 19 per cent below where it was last year and 4 per cent below 2008 levels.
SQM Research director Louis Christopher said Melbourne property prices would fall by at least 5 per cent this year.
"That's already in the bag, no doubt," Mr Christopher said. "What happens after that depends on interest rates and the general economy."
Another 885 auctions are scheduled for this weekend, putting further pressure on vendors to drop reserves.
The latest figures from RP Data show Melbourne vendors were forced to drop house prices by 6.5 per cent in March to wrap up a sale.
The average discount on units was 6.9 per cent.
A glut of property is sitting on the market, with SQM estimating there is nine months' worth of stock to be absorbed by buyers.
A balanced market offers two months' worth of stock.
The volume of housing for sale at the end of April was double that of a year earlier.
"Melbourne is one of the most over-supplied cities in Australia at the moment," Mr Christopher said.
"There are 'For Sale' signs everywhere and that is going to lead to price declines beyond this year."
Buyers were few and far between at the sale of 3/107 Landells Rd in Pascoe Vale yesterday.
Four people turned up for the auction of the two-bedroom unit, but no one offered a bid and the property passed in on a vendor's bid of $330,000.
"There is a lot of similar property on the market at the moment, so really it is a buyer's market," Harcourts Epping agent Robert Ozzimo said.
"It's tougher at the moment than it has been in past years, but I'll get this one across the line."
A crowd of 40 attended the auction of a three-bedroom, two-bathroom single-fronted Victorian house in Hawthorn East.
Four bidders battled for the property, which eventually sold for $1.09 million to an accountant in his 40s.
"I think it's a good buy in a good street in a good area," the man, who asked not to be identified, said.
"The market has come off a little bit in the last month or two, but quality properties in quality areas are still worth it so I'm not worried."
Morrell & Koren Bayside director Damian Taylor said buyers were holding off, expecting further price falls.
"Buyers are not convinced the bottom has come," he said.
Mr Taylor said even though stock levels were up, quality homes were still recording good sales results.
"There is a fair bit of ordinary property out there," he said.
"Anything not blue chip is being dealt with very harshly, but at the same time when that really good house does come up there is competition for it."
REIV spokesman Robert Larocca said estate agents would have their work cut out for them this winter.
He said: "It's certainly going to be a slower winter than last year but it's not a disaster by any stretch.
"There is no doubt it is a buyer's market and giving buyers better opportunities is not a bad thing.
"Overall sales volume is still higher than 2009, so the market can have a self-correcting measure."
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