Residential property sales have plummeted nationally as middle and high end owners avoid listing their properties as the financial turmoil continues.
In Sydney sales of homes at auction are just over half the level they were at the same time last year, while sales in Melbourne have plummeted to less than a third.
But there is an increase in activity at the lower end of the market. 'We've seen a decrease in transactions right across the board. Home owners have become unwilling to sell unless they are forced to. The median to higher end where most of the action usually takes place has slowed down to a whimper. But we're seeing a lot of increased activity in the lower end of the market,' said Enzo Raimondo head of the Real Estate Institute of Victoria.
And SQM Research managing director Louis Christopher said first time home buyers have buoyed lower end sales probably due to an increase in grants available to them. But he cautioned against rushing into the market because prices were likely to fall further.
However, research from the Market Intelligence Strategy Centre has found that the 'real' property market is actually far more robust than official data suggests.
According to MISC, the value of new mortgage settlements rose 18.5% to $46 billion in the December quarter, which it attributed to the Reserve Bank's three rate cuts during the quarter, totally 2.75%.
MISC takes its figures from actual mortgage settlements derived from state governments' stamp duty data as opposed to the Australian Bureau of Statistics, which uses mortgage commitment data provided by selected lenders.
The ABS data showed a 20% fall in the December quarter residential building approvals, seasonally adjusted, while the value of owner-occupied housing finance rose 3.49%.
