The Boil

Can you feel the heat? The Tasmanian real estate market is hot again, or as the reprobates at The Mercury called it, 'back on boil.' As you might note, one lone soul voiced his disgust, "What rubbish, sensationalistic yet again. Another promo?" Before you ask, no, I'm not 'Blah' of Hobart.

Our friend Blah has a reason to be frustrated. The Mercury couldn't put a name to the story and it was completely void of any detail, except for one figure - sales were up 9.8% in October - that was the reason to be happy and why sellers are in for a ripping good time.

Except The Mercury's report left out one little detail - sales over the year. While prices were behaving schizophrenically over the state, up 12% in Hobart over the year; down 19% in Burnie; up 32% in Ulverstone and down 6% in Devonport, sales were doing in one clear direction - down.

Crashing 16% in Hobart; 40% in Burnie; 55% in Ulverstone and 25% in Devonport. 

We can thank Sean Ford for the honest reporting and only presenting the figures as they stand because despite any bluster coming from the REIT, these figures have the waft of a rotting corpse coming from them. Trying to spray that corpse with Glade, by suggesting a monthly upturn is something to get excited about, well sorry, but the stench of death doesn't come out of the carpet that easy.

And that's before you add the pong of a second rotting corpse - the explosion of listings being experienced.

The Apple Cinnamon PlugIns Scented Oil won't cover up that one either.

By my calculations, Launceston listings are up 9.8% November 1 to December 1. Anecdotally, similar explosions are happening from the North to the South. The most damning statistic is Burnie's median dropping 46% in a month - don't get excited and call the University of Western Sydney asking for Steve Keen yet, because that's not an indication of what you'll get a house for... at the moment anyway, but a market that is able to swing so wildly in a month is a terrible sign for one reason - no one is buying houses. 

When sales are smoked, the price data can, and will, twist in the wind, sending out a rush of false negatives or positives. This is the scenario where if the doctor says you do have herpes - it's best to get a second opinion. And if he says you don't have the herpes - don't get all horny and start feeling up a house.

You may pick up another lust fuelled disease - negative equity.