11 March 2011

REIV capitulates

This is the moment I’ve been waiting for.  The biggest property spruiker in town, the Real Estate Institute of Victoria (REIV), has admitted that house prices are set to fall!  No, they didn’t say there would be an “easing in prices”, or an “improvement in affordability”, or “slower growth”.  Yesterday, they announced that:

“Members report positive expectations for market activity in the March quarter at the same time as a drop of 3–5 per cent in the median house price is expected.”

What’s not clear is whether they are expecting a 3-5% fall over the quarter or over the entire year.  It certainly sounds like the former.  If so, and if that can be annualised, that’s a 12-20% fall over the year.  They’ve become even more bearish than me!

Of course, they do regain their composure to finish with the obligatory spruik:
“The outcome of these factors is good buying conditions.”

Buyers – you’ve heard it from the REIV, start buying property – prices are about to crash!

Comments welcome.



  1. Number of houses successfully sold at auction, according to the link:

    Same time, 2009 : 309

    Same time, 2010 : 602

    Last weekend : 603

    Interpreted without attention grabbing headline spin : Last weekend, almost twice as many successful auctions were held, compared to 2009. There has been approximately a 95% increase in successful auctions between 2009 and 2011.

    Looking good, thanks for the link!

  2. hahahaha REIV your Fu*K11/3/11 2:47 PM

    Problem for the REIV is that when their supposed "good buying conditions" arrive, lol, it's not going to help.

    Investors have been taught to buy properties with equity, not cash, so it could be a little hard for them to buy another property when their equity is diminishing as well as not being accessible courtesy of the banks (due to a declining market).

    And us bears (the only ones who have cash) sure as hell arn't going to start buying.

    I hate you REIV and I'll enjoy pissing on your grave.

  3. Based on REIV article, that's 65% of 928 which is 603 (as above comment mentions).

    So i get that much.

    But i then look for where that 65% comes from and all i find is this link

    This APM report link shows March 5 Melbourne auction results as 65% sold on 352 properties.

    Just find it weird that 65% in REIV article is the same percentage quoted for the APM results shown for only 352 properties.

    Is there an updated list where they return results for all 928? Is that something I'd have to buy from APM (Based on the link, it states that you have to contact them for full results per postcode for the last 12 to 24 months but I just want the complete list for March 5).

    Would be much easier if they just updated the APM report to reflect all 928 listings.


  4. I like how they say "The clearance rate may be in the mid 60s...." lol

    After reading about the fraud going on in clearance rate reporting, they could have equally said "the clearance rate my be in the mid 30s.....".


  5. Anonymous # 1 @ 2:32PM – I’d say it’s the clearance rate that’s important, not the number of sales. The clearance rate, as you can see, has plummeted this year. In addition, I have a feeling you might be comparing normal weekends to ones that were Labour Day long weekends in previous years.

  6. Hi Anonymous @ 3:09PM – the only place I know of to get the full REIV results is the Sunday newspaper.

  7. Clearance rates have no reflection of prices. Last week a 2 bedroom townhouse was passed in at $740k and was later that day sold for $849k. I have more examples of this kind. Clearance rates simply put an urgency on purchasing, but it doesn't always indicate that the property cant sell for the asking price as most of you would like to believe. Don't waste your life speculating, if you have the income to comfortably support your purchase, dont wait for your fairytale circumstances.

  8. Sensible

    the example you give is indeed a rare exception nowdays... perhaps the person who paid $849K for a 2 bedroom townhouse was mentally retarded?
    or perhaps he/she didn't realise they could do much better than that in Manhatten?

    Either way, the place would never be worth that sort of money, and this would be born out had the purchaser applied for a 90% or 95% mortgage...

  9. JB - if you want to compare NY prices, at least take a look at what you get first, then give us a link.

    In my area two houses on the weekend sold above asking price (not at auction).

  10. 2011:

    Average price in Tribeca, Manhatten, is still over 2 million USD.

    Little Italy, Manhatten, is about 1.2 million USD.

    Harlem, Manhatten, average sales price Dec '10 - Feb '11 $660,549

    Tribeca, Manhatten : Avg. sales price
    Dec '10 - Feb '11 = $2,980,024

    I purposely left out the really nice areas in Manhatten - they are a shit load more expensive than any of the above examples.

    Data freely available on the internet.

    Here's an example of actual sales data:


    As you can see, apartment prices in Manhatten are more expensive, by a long shot, than the average price of HOUSES in Australia. EVEN IN HARLEM.


    Thankyou! Come again!


  11. Anonymous:

    On the surface that looks like compelling evidence you've presented there.

    I have a friend whose lived in Manhatten for the past 3 years. The figures she has given me in the past do not correspond to those you've given here, but admittedly she is only once source of info, so I'm leaning more towards your side at this point. I'll have a look when i have some time.


  12. Peter Fraser17/3/11 2:10 PM


    Yes if you had included the East Side the prices would be very high indeed.

    Really though Manhattan isn't a good comparison to Sydney, I prefer San Francisco where you will find that house prices and lifestyle are similar, and both have great harbours.

    They even have eucalyptus trees.

    Despite the crash in the USA median prices are still similar to Sydney.

  13. The issue for all the investor idiots is that when the economy turns they will not be in control. The whole premise of their model of 'success' is that it is based on an assumption of continually rising prices and the fact that the taxpayer subsides their amateurish investment efforts. When the economy turns down and interest rates rise then offloading (de-leveraging) will not be enough as everyone will be doing the same - you can't create value from nothing. Australia is like Ireland, lots of hot debt flowing into the economy, lax lending standards and everyone buying off each other.

  14. Rents will continually rise.

  15. Your point annonymous?

  16. lain, I generally agree. Although, when the economy turns down, I’d say interest rates will fall, not rise. Also, please let’s avoid insults and name-calling on this blog.


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