We are in what we term a consolidated market, with house values holding steady due to a lack of market supply. Although more cautious than in previous months, buyer demand is strong enough to ensure prices remain firm.
We believe that the majority of non-cash buyers venturing into the market need to sell before they buy, but the problem for them at the moment is that they are not sure whether or not they are going to have any properties to choose from. This slow-moving cycle will continue until an economic, political or social change occurs that brings more supply to the market.
What we do know is that the recent drop in the OCR, which translated into even lower interest rates offered by the major banks, coupled with a guarantee from the present government that there would be no CGT (Capital Gains Tax), has halted the fear of large price drops that we have seen across the Tasman in the Sydney and Melbourne markets.
Eventually, volumes will have to come back to the long term norm, but in the meantime property continues to change hands for the normal reasons they always have done: birth, deaths, relationship changes, job changes, upsizers and downsizers.