MELBOURNE:- The worst fears of real estate agents and property vendors has arrived: the orderly sale of property has broken down. A twenty year uptrend made Australian real estate ‘most severely unaffordable’ and a Ponzi scheme propelled by consumer debt. Prosper says prices are now in free-fall.
“Anyone buying at current prices is a damn fool,” Prosper Australia campaign manager David Collyer said today. “The sheer weight of property available will drive prices down as must-sell vendors discount and discount again.
Auction clearance rates across the nation have fallen below 50 per cent.
“Auctions are left dangling at unrealistic vendor bids. How can a seller offer to buy their own property and expect others to compete with them? This is madness.
Stale stock – properties offered but unsold for over sixty days – is piling up.
“The SQM Research data is crystal clear. Our survey of postcodes 3000-3207 show unsold stock blowing out from 19,700 to 26,000 properties in the last two months alone.
“We particularly warn against buying in Point Cook 3030, where stale stock has risen from 1634 to 2319 houses in that time. Only 564 Point Cook houses sold in all last year. The area is in profound oversupply.
Finance is available only to squeaky clean credit risks.
“ABS finance approvals (April 2011) show a record low 15.8 per cent of finance going to first home buyers. Both banks and buyers abruptly discovered the virtues of caution and prudence.
“Why should FHBs – the essential foundation the whole market is built upon – be expected to catch a falling knife? Lower prices are immediately ahead.
“Why should FHBs commit to an entire lifetime of heavy debt to buy crummy and unsuitable ‘starter homes’? They are expected to sign away a lifetime’s earnings – their entire future – to buy that first step on the property ladder.
Prosper has been one of the few voices contesting the constant, self-serving spruiking by the property industry. “We do not claim to lead the sudden end of sacrifice. The Home Buyers Strike sought to inform buyers of what is actually happening in the marketplace.
“Vendors and the property industry ruthlessly exploit FHBs’ inexperience. Their agenda is to sell out ahead of the correction. But market power is now in the hands of FHBs and prices will continue to lower – provided they exercise restraint and resist buying at these ridiculous income multiples.
“The path to freedom and prosperity is clear: continue renting or living with relatives, save a larger deposit, and follow the price correction from the sidelines with interest.
Don’t Buy Now!” Collyer concluded.