How far will house prices fall? – Nervous property buyers wonder.
Nervous home buyers are holding back at auction because they are worried about their new property being worth less money in the future as the housing market falls.
Buyer confusion about how much to spend and the uncertain outlook for interest rate rises have also led to a string of homes passing in and selling after.
The preliminary auction clearance rate in Sydney was 66.8 per cent this weekend, its highest since late March, albeit on lower volumes, while Melbourne’s result was 61.1 per cent as many listings went to post-auction negotiations. House prices in both cities have fallen sharply as interest rates jumped.
Buyers are nervous about knowing how much to pay – and what not to pay – Cooley Auctions managing director Damien Cooley said.
How will anyone know when falling prices have reached their trough? “We don’t,” Cooley said. “It’s very difficult to know when the market has bottomed.”
The trough might approach once interest rates stabilise, buyer confidence improves and inflation slows, he said, but he warned once buyers think the market has hit its low point there could be a price rally.
Article Credited to Elizabeth Redman, The Sydney Morning Herald
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