Urban apartments in market 'free-fall'
22 May 2004
 Despite the best efforts of real estate agents in
the nation's biggest property market - Sydney - prices continue to drop,
with one senior property economist claiming inner-city apartment prices were
going into free-fall.Raine & Horne's midweek auction results for
Sydney's exclusive eastern suburbs show just nine of the 31 properties
listed for auction were sold - less than 30 per cent - and of those, four
were priced above $1.6 million.
Of those not sold on Wednesday and Thursday night, nine were withdrawn
from sale due to lack of buyer interest.
Ray White sold only three of the nine properties listed for sale in Bondi
on Wednesday night.
Experienced property economist Akis Haralabopoulos, from Alpha Economics,
said prices in inner Sydney were being smashed by the combined effects of
two interest rate rises, the Carr Government's new 2.25 per cent tax on
investment property and an oversupply in apartments.
"The fact most of the properties that sold were priced at over $1.6
million highlights the fact the market is suffering a serious correction,"
he said.
"Prices of apartments close to the CBD are going to add a new meaning to
the term free-fall - they could fall as far as you like - and they have a
while to go yet."
Mr Haralabopoulos said he knew a developer who approached an agent about
dropping the price of apartments in a large-scale luxury development by an
average of $100,000 each - and the agent said "they still wouldn't sell".
Property owners in the suburbs and regional areas such as the central
coast and the Illawarra region were less likely to be stung, because most
owners were not investors and would not be prepared to sell their properties
for less than they paid, he said.
Ray White chief auctioneer Tony Fountain said many agents had not adapted
to the new market conditions.
Reproduced from The Australian newspaper, 22 May 2004.
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