Auctioneer Daniel Hayes says home sellers have been spoiled by the buoyant state of the market in the past couple of years. Picture: Stephen Harman
THE days of double digit house price growth in Geelong appear to be over.
New figures provided exclusively to the Addy show a changing market over spring, which a leading real estate agent said meant sellers should be prepared to accept their dream figure might not become a reality.
Geelong was the nation’s leading major regional property market in September with capital growth for houses above 16 per cent, according to a CoreLogic report.
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But new CoreLogic data on Monday showed the rate of growth had contracted to 8.6 per cent for the year at the end of November.
By comparison, dwelling values fell 5.8 per cent annually in Melbourne.
It’s a further sign of the changing conditions in Geelong, along with slowing auction clearance rates.
An analysis of November auction results shows a 62 per cent selling rate for the month, though weekly clearance rates dropped to as low as 40 per cent.
Last weekend the clearance rate was 47 per cent, CoreLogic reported.
CoreLogic head of real estate business Geoff White said Geelong’s capital growth had tapered slightly since September but the city remained the nation’s third-best regional real estate market.
The number of properties being passed in at auctions is rising in Geelong. Picture: Mike Dugdale
“Over the past two months we’ve been watching the clearance rates in Geelong and it’s getting closer to what the Melbourne market is doing to some extent,” he said.
“It’s gone from more of a sellers’ market to more of a balanced market in Geelong. Melbourne is a buyers’ market,” Mr White said.
Hayeswinckle director Daniel Hayes said sellers need to be prepared to accept less than their dream figure if it was clear the market didn’t agree with their best expectations.
“A lot of vendors will want a dream figure and have a realistic figure and a figure they have to take,” he said.
“And then there’s what the market will pay — vendors can hold out for that dream figure but if they can’t trust their agent that they can get something that’s in their realistic range or the figure that they have to take.
“What they don’t want to do is knock back an offer on auction day and then take it three weeks later.”
But Mr Hayes said the slowing rate of growth won’t change the significant capital gains made by sellers if they’ve owned a property long term.
“We can’t sustain that level of growth forever. It’s a correction. it has to come back. But Geelong doesn’t take the main hit like Melbourne, it’s more of a ripple,” Mr Hayes said.
Mr Hayes said 5 to 10 per cent capital growth is realistic for a market like Geelong.
“We’ve been so spoiled. People have bought a house for $400,000 and made $100,000 in a year. It’s not sustainable.”