Buyers snaring property bargainsHOME buyers are already snaring property bargains as Melbourne's real estate market begins to feel the effects of rising interest rates and falling auction clearance rates.
House prices are being knocked down by as much as $20,000 by desperate sellers. And of about 1300 auctions scheduled for this weekend less than half are expected to sell.
Australian Property Monitors research director Louis Christopher says auction clearance rates could drop to 45 per cent - Melbourne's lowest level since May 1995.
"Prices are certainly slowing down now,"Mr Christopher said.
"Buyers can afford to be choosy. Smart buyers are realising it's turning into a buyers' market rather than a sellers'."
Savvy home buyers are reaping good buys from the plunging auction clearance rates.
Many are negotiating lower prices after a property has failed to sell at auction.
A Kew house was passed in at auction for $880,000 three weeks ago, well below the seller's $920,000 reserve.
This week the four-bedroom home sold privately for $899,500 - $20,500 less than the owners wanted.
The shift in the market means there is now more properties for sale and less demand for them.
In the years of the property boom, the scenario was reversed with little real estate stock and plenty of buyers.
The effect was a surge in property prices, which saw Melbourne's median house price jump from $205,000 in 1998 to $335,000 in 2002 - a 63 per cent jump in four years.
Buyers' advocate Christopher Koren says agents are now trying to woo buyers.
He said the changing climate of the property market makes it a perfect time for buyers to enter the market.
"Be patient - if you make an offer and the agents says no, walk away and let the mountain come to Mohammed,"Mr Koren said. "Because you can be sure that you are one of the only ones dealing with the agent."
Statistics from Australian Property Monitors show only 53 per cent of the 4356 properties to go under the hammer in November were sold. The median auction price in Melbourne was $367,000.
Buyers snaring property bargains
By Kate Jones
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