House prices, sales fall as gloom continues

The gloom continues for the property market with auction clearance down in several major centres and prices suffering the worst fall in 25 years in one capital city.

Weekly auction clearance rates fell in Melbourne and Adelaide and were only marginally up in Brisbane and Sydney, The Australian reports.

Meanwhile, the once booming Perth property market has recorded its third consecutive quarterly fall in the median house price - a phenomenon not seen in 25 years - as talk of a recession eats into consumer confidence.

Real Estate Institute of Western Australia president Rob Druitt said the Perth market was moving into uncharted territory with a combination of falling house prices and dwindling sales. He predicted that a fourth consecutive fall was likely before the market began to recover.

'Extend home buyers' grant'

The Rudd Government is being urged to extend its $21,000 grant for first-time buyers of new houses by at least six months as hopes fade for a pre-Christmas turnaround in nationwide house auction sales. Housing sector analyst BIS Shrapnel called on the Government to extend the grant to kick-start estate housing construction and provide momentum for the wallowing apartment sector.

BIS Shrapnel senior economist Jason Anderson said: "Using more of the Budget surplus to extend the extra grants period will have greater economic benefits than tax cuts, given the risk that tax cuts could be saved rather than spent.''

Last month, the Federal Government doubled the $7000 first-home buyers grant to $14,000, and gave a further $7000 for new houses, but the extra money will be paid only until June 30 next year.

Source: The Australian.