Real estate prices plunge
THE sales figures speak volumes.
If anyone doubted that the real estate market in the Northern Rivers had slumped this year, recent statistics reveal the harsh truth.
The number of sales and the prices fetched have dropped drastically in 2011.
Prices in many cases are down from a peak in 2010 – indicating the full extent of the GFC took a while to strike Australia.
Figures for the past six years tell slightly different stories for the five local government areas in the Northern Rivers, but they all share a common theme.
To add to the frustration of both vendors and buyers, the entire transaction process has slowed down, largely due to the hyper-caution being shown by the big lenders.
John Nicolson, principal of McGrath Ballina/Byron, said the situation was “fairly alarming” for vendors.
“For instance, there are 40 houses in Lennox Head on the market for more than $1 million.”
The last property to sell in Lennox for that kind of money was in September last year, he said.
“This year the best price reached was $795,000.”
The biggest change between now and the same period last year was that interest rates had gone up and Government stimulus money had dried up, he said.
This had had an impact on the lower end of the market, which in turn affected the middle and top ends.
But Mr Nicolson said he had been through property booms and recessions before and that long-term gains always took care of short-terms variations.
Reality bites: Buyers know more, pay less
The market may be “dead”, as one agent described it, but people still have to get on with their lives.
That often involves changing location, which means they have to sell and they have to buy.
But the abundance of properties on the market is matched by the surplus of information in the media.
Buyers are both spoilt for choice and better informed than they have ever been – and more cautious following the shockwaves of the global financial crisis or GFC.
If a property is overpriced by even a small percentage, it won't attract any interest.
Those vendors needing to move are having to adjust to this harsh reality.
Some refuse to and will hang on and wait for a buyer – or a new dawn.
Others, like Gay Schofield are more realistic.
She has recently reduced her 32ha Clover Park Stud farm at Wyrallah from $780,000 to $730,000 in order to “meet the market”.
“The money's not around at the moment,” she said.
“Everyone is holding off until they see what happens with the interest rates.”
Ms Schofield's property has two houses, fronts on to three roads and has development potential.
She has had three offers but they all fell over due to financing problems.
After discussions with her agent, Katrina Beohm, she decided the only option to achieve a quicker sale was to bite the bullet and ask for less.
Mrs Schofield is a motivated vendor because she wants to move her mother and brother, who has a disability, into central Lismore.
She will also move “but not into town”.
The price move has already borne fruit, she said.
Last weekend a family looked at the property and made an offer which she is considering.