Market lull forces prices down

A NUMBER of advertised homes have dropped their prices by up to 10 per cent in the last two weeks just to find a buyer, Hegney Property Valuations managing director Gavin Hegney said.

He said the real estate market was in a lull.

“We have an abnormal real estate market because there is a lack of genuine home

buyers caused by the impact of the GST and the lingering impact of interest rate rises, in addition to the normal seasonal decline,” Mr Hegney said.

Mr Hegney said the experiences of the firms’ 17 valuers showed that house prices were dropping across the board.

“People who want to sell their home in the current market may have to sell well below true market price in order to find a buyer.

“Unfortunately, at the moment there are only bargain hunters in the marketplace.”

He said those worst affected by the lull were those forced to sell their property as a result of loss of employment or marriage break-up.

“In contrast, homeowners who want to sell their home for a genuine market price will need to wait for a longer period of time before willing buyers enter the market,” Mr Hegney said.

“When such a large change as GST occurs, it causes uncertainty in the real estate market and homebuyers become more hesitant about making such a large investment as buying a new home.

“The only concern is that the cyclic housing market has peaked and the level of prices may be adjusting down on a more permanent basis.”

Real Estate Institute of WA economist Lino Iacomella disputed the claim by Mr Hegney. He said price levels should be maintained as the price increases last year had not been excessive.

Mr Iacomella expects prices to be sustained for the next six months but sellers should not expect the same gains experienced last year.

“However, prices will not fall,” he said.

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