Activity Increasing On The Home Front

In our little coastal hamlet town of Dunsborough in Western Australia’s south-western corner, I am noticing increased activity in homebuilding and real estate sales. As AUD borrowing rates are under 6% and cash deposits are closer to 3.5%, I started thinking that the sector may find some support.

Anecdotally, at least, electricians, plumbers and concreters are telling me that they have been steadily busy over the past couple months and quoting on a growing amount of jobs. Builders are saying that their orders books are growing and some are cautiously close to calling it a “back-log”.

Real Estate Agents have seen mere inquiries turning into written offers. Their representatives are back selling homes and I have seen many “SOLD” stickers on boards outside houses as I drive around.

This prompted me to make some calls to friends in the Eastern cities of Melbourne & Sydney to ask about their property observations, which have also turned out to be positive.

When questioned about the prices some of the houses were selling for, the answer has been similar. The vendors have tempered their expectations by meeting the market, buyers have stopped placing bids at ridiculous “fire-sale” levels and the prices achieved seem to be closer towards the 60%-70% level of the sellers original wish, which seemed to be “anchored” to prices seen 5 years ago.

I can’t say if property is cheap or if the prices are fair, but it does tell me that confidence is returning. Often that is a recipe, in order to “make a market” in the first place!

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