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Auction property sales in Australia indicate increasing buyer interest

Auctions in cities like Melbourne are achieving 77% sales. And although there are fewer auctions compared with the same time last year, sales are not down hugely.

The Real Estate Institute of Victoria said that recent reductions in interest rates are leading to a healthy number of interested buyers but it is fear of job losses that is putting people off.

Typical is an auction last week where there were 436 properties for sale of which 337 were sold. One Melbourne-based buyers' agent, JPP Buyer Advocates, said that there were actually only 16 fewer sales last weekend than in the same weekend of February 2008.

Properties are selling before auction and those that go at auction are achieving prices strongly above expectations.

As it is only the start of the real estate year the industry is hopeful that it may go better than the doom and gloom headlines suggest. But sales vary from region to region.

In Sydney, fore example, there has been a big increase in prestige property on the market, but not so many buyers. Sydney-based Curtis Associates said that the amount of prestige property on the market has increased.

In Woollahra alone, historically one of Sydney's most resilient suburbs, at least 27 prestige homes were publicly advertised for sale in stark contrast to 15 months ago, when stock in the suburb was in such short supply that finding a prestige property was like looking for the Holy Grail. There are also an increasing number of upmarket properties going to auction.

McGrath Estate Agency chief executive John McGrath said the two main factors affecting the property industry at present are interest rates which keep going down and unemployment which keeps going up.

'It is perhaps the best time since the early 1990s to be buying if you have stable, secure employment but some homeowners who lose their jobs may struggle to meet repayments and be forced to sell,' he said.

'The knock-on effect of this is that prices may soften further and provide great buying opportunities, particularly in premium suburbs,' he added.