At last some good news on the housing market

There are tentative signs that property prices might again start to weaken. Discount on houses sold at auction have recently started to widen.

From the FT....

Hopes that the housing market has emerged from slump may prove premature, after a leading indicator of house prices suggested fresh weakness ahead.

The median discount on houses sold at auction compared with their value in the conventional market rose to 18 per cent in July from 13 per cent in June and 11 per cent in May, research published today shows.

The second consecutive month of increasing discounts on auction properties could point to a further downturn in house prices.

Auction prices should provide an early warning sign of changes in house prices because most sales close within a day and many sellers are under pressure to dispose of properties, providing a "mark-to-market" value of what properties are worth.

Prices in the normal market can take much longer to adjust as sellers and agents are slow to realise prices have risen or fallen, while the transaction process is much slower.