Sellers with FONGO race to beat property clock

PHOTO: The property at 12 Toothill Street in Lewisham sold just below the $1.3 million reserve.

Some investors are acting decisively to beat the the property clock, dropping their reserve prices to meet the market before it falls any further and wipes out whatever gains they have made on their investment.

Following the revelation in AFR Weekend that the property downturn has left the buyers of as many as 450,000 properties in Sydney and Melbourne with homes worth less than what they paid, weak weekend clearance rates point to the emergence of FONGO, or the fear of not getting out before prices fall further.

On preliminary results, the national clearance rate was at 56.1 per cent this week, increasing from last week’s final clearance rate of 47.8 per cent, according to CoreLogic Final clearance rates are typically several percentage points lower than the preliminary numbers. One year ago, a clearance rate of 66 per cent was recorded.