Hi,
The REIV clearance rate again remained steady at 69%, even on a higher number of auctions which is demonstrating the property market is remaining stable. 410 properties sold at auction, 134 selling before auction and 244 passed in. There were an additional 151 private sales. Interestingly the numbers were much higher last year as we came out of the last lockdown with 1,204 auctions reported to the REIV and 90% of them selling.
The median house price in Melbourne fell 7.4 per cent in the September 22 quarter according to the REIV to $993,000. But the data is certainly showing some inconsistencies. Some suburbs are continuing to have price growth whereas others are declining. The median house price can also be skewed if there are less higher end properties selling which can also bring the median house prices down. Although on the ground, there is no doubt there has been some softening in prices (generally speaking) and many vendors are realising this and adjusting their price expectations in order to have their property sold. Units and apartments seem to be holding their prices a little more with a quarterly change of 2.8%. The data in Regional Victoria is suggesting that the median house price has dropped 2.8% to $611,000 and units/apartments down 2.3% to $425,000.
The rental market is one of constant discussion with some investors getting excited about rental prices increasing significantly as the media suggests. There is no doubt the amount of vacant properties available is tightening. As a company, we have never had such little supply available for lease. That being said, it hasn’t translated in huge rent increases yet in the Melbourne and Geelong rental markets. Properties are leasing out quicker but still are somewhat price sensitive. That being said, with the sudden tightening of supply, this absolutely could start translating into rent rises. It will be interesting to see what happens over the next three to six months.
There were still plenty of buyers out on the weekend and family homes are still proving to be a stronger segment of the market. 21 Parker Street, Ormond went to auction and is a well located, five bedroom, two bathroom, updated period home on 666 sqm. The property was quoted at $2,000,000 to $2,200,000 prior to auction and attracted six bidders with the property selling for $2,292,000 on a reserve of $2,170,000.
Have a great week.
Kim Easterbrook
Hi,
There were 485 auctions reported to the REIV on the weekend resulting in 259 selling at action, 80 before auction and 146 passing in resulting in a clearance rate of 70%. There were an additional 283 private sales reported.
It seems we are not quite back into a normal Spring season yet. Stock levels are still low where a normal Spring auction season would usually result in a flurry of properties coming onto the market. Many vendors are holding off selling their properties until more confidence comes back into the market.
That being said, the auctions we attended on the weekend were all competitive with not just one or two bidders, some upto five bidders. The property market is definitely showing some resilience over the negative press and rising interest rates. With the four banks all agreeing the end of rising interest rates is in sight, it is giving buyers confidence to take advantage of the current market conditions which is more favorable to buyers than the same time last year.
Whilst auction numbers are down, there is a rise in private sales which often happens in a property market that is not booming. Private sales allow the agent more power in a negotiation than an auction that could only have one or two bidders. It allows the agent to keep their buyer pool cards close to their chest where an auction publicly displays if there is lack of demand on a property.
Thornbury was popular with buyers on the weekend with two auctions attracting competitive bidding. 21 Mansfield Street, Thornbury auction was brought forward a week due to an acceptable offer of $2,450,000 being offered prior to auction. The four bedroom, two bathroom, renovated home on over 400 sqm of land was quoted at $2,100,000 to $2,300,000 prior to auction. The auction attracted three bidders over $2,450,000 with the property selling for $2,615,000, $315,000 over the reserve price.
Another auction at 16A Kelvin Grove, Thornbury was quoted at $950,000 to $1,045,000 prior to auction with the auction attracting five bidders. The well located two bedroom, one bathroom home, in liveable condition but requiring an update in the future was popular. The opening bid of $950,000 was quickly challenged with four other bidders participating in the auction. The property sold for $1,180,000 which was $120,000 over the reserve price.
Have a great week.
Kim Easterbrook
There were 512 auctions reported on the weekend to the REIV producing a clearance rate of 69% yet again. 287 sold at auction, 66 before auction and 158 properties passed in. There were an additional 168 private sales.
The Reserve Bank of Australia met last week and increased the cash rate to 2.6 per cent. The increase of 25 basis points was lower than the 50 basis points that was widely predicted. Whilst this hasn’t stopped many buyers from being cautious, the rate increase slow down has given some buyers confidence that Spring might be the time to buy. The REIV auction clearance rate is still remaining steady in the high 60%’s and whilst stock levels are predicted to rise, it is unlikely to be a highly active Spring season that we had seen in pre-Covid years.
At Elite, we noticed a difference between our new buyer enquiry levels from the 0.5% rate rise in September to the 0.25% rate rise in October. Last week, after the cash rate announcement, our phones were busy with buyers ready to transact in Spring. Three of the four big banks have also adjusted their interest rate predictions with ANZ predicting a peak of 3.6% in May, Westpac predicting a peak of 3.6% in March, NAB predicting 3.1% in February and CBA predicting 2.85% in November this year. Whilst these are only predictions, the good news is that we may be only upto 1% away from interest rate stability, and to levels that are more the norm. Certainly no one is anticipating we will have interest rates as low as what we have had over the past two years again, and buyers are starting to regain confidence around that.
The market is not allowing vendors to be greedy, but ones who are realistic in price are mostly selling. Auctions we attended were mostly selling close to the reserve with fewer runaway results. 1 Cherbourg Avenue, Beaumaris went under the hammer which is a three bedroom, two bathroom unrenovated home in the Beaumaris Secondary College zone which is very highly sought after. Land size is 593 sqm. The property was quoted $1,600,000 to $1,650,000 prior to auction and sold for $1,707,000 with the auction attracting four bidders. $40,000 above the reserve price.
Have a great week.
Kim Easterbrook
Hi,
There was an increase in auction activity over the weekend as we head into the Spring season. 542 auctions were reported to the REIV, 287 sold under the hammer, 85 sold before auction resulting in clearance rate of 69%. There were an additional 344 private sales.
Stock levels are on the rise and many are asking whether now is the right time to buy. With higher stock levels predicted, some degree of market uncertainty and rising interest rates, this could actually make for the best conditions for a buyer that we have seen in quite some time, and a time that might be short lived. As I mention time and time again, the property market is not as dire on the ground as the media are reporting. The clearance rate is consistently sitting in the high 60’% and the market is feeling stable. Most properties that we are purchasing at present are under competition from multiple buyers.
CoreLogic just released their quarterly data which suggests that Melbourne house prices dropped 1.1% in September and 3.7% for the 3rd quarter. This somewhat does reflect what we are seeing with some of the results however it can’t be said for all properties with quality family homes being in short supply and still achieving some high prices.
Once we see inflation under control and stability in interest rates, there is no doubt we will see confidence back in the property market. There are many buyers just sitting on the fence right now waiting for the right time to buy. Unfortunately, we never know when the bottom of the market actually is until we see a rise in property prices again. However, whilst there are less buyers willing to transact at this particular point in time and stock levels are rising, now could be the right time for some of these buyers to transact.
128 Farrell Street, Port Melbourne went under the hammer on the weekend and is a very well located, two bedroom, one bathroom single level period home in need of a makeover. Quoted $1,150,00 to $1,250,000 prior to auction, three bidders competed to secure the property pushing the price $154,000 over reserve to sell for $1,354,000.
Have a great week.
Kim Easterbrook
Hi,
There were 653 auctions reported to the REIV on the weekend achieving a clearance rate of 70%. 352 properties sold at auction with 106 selling before auction. There were an additional 195 private sales. Interestingly, last week’s final clearance rate was also 70% on 677 auctions.
We have entered into a market of negotiations rather than properties mostly selling under the hammer. Most auctions are experiencing less bidders than what they would have late last year. 70% clearance rate for the past two weeks represents a stable market where buyers and vendors are willing to transact. More auctions are passing in but they are passing in on a genuine bid and some buyers are taking advantage of the current market conditions. It is a tricky market though, some properties are selling for less than what they should have, yet other properties are selling well above expectations.
The family home market currently is a strong segment of the market. Lack of stock and maybe a hangover of demand from Covid lockdown days may be driving this.
A couple of examples of these are:
A big auction on the weekend of 281 Richardson Street, Middle Park. The property was quoted at $4,000,000 to $4,400,000 prior to auction and the auction attracted bidding from five buyers. The crowd of over 200 people watched the price achieve over $5,000,000 where the property sold for $5,050,000 which was well above the reserve price.
A Geelong property broke the residential house price record for the suburb with 5 The Esplanade, Geelong going under the hammer. The four bedroom, two bathroom home on 892 sqm with absolute waterfront views was quoted at $4,000,000 to $4,400,000 prior to auction but interestingly the reserve was set at $3,800,000. The bidding (from three strong buyers) went way past this and the property sold for $5,225,000.
Have a great week.
Kim Easterbrook
The REIV auction clearance rate remained stable over the weekend with 541 auctions reported. 372 properties sold with 282 of those selling at auction and 91 before auction. There were an additional 190 private sales.
The increase in interest rates last week came as no surprise with the official cash rate rising to 2.35%. There appears to be a consistent pattern with buyer behaviour each time an interest rate rise occurs with the week after, some buyers coming to a standstill. Some need time to adjust to the idea of higher mortgage repayments but also need time to calculate what that means for their budget.
Some auctions last weekend had large numbers in attendance but few willing to put their hands up. Those buyers that are confident enough to bid at auction are often buying the property immediately after it passes in. This means that vendors (generally speaking) are willing to negotiate to ensure they sell their property and likely the buyer has paid less than they were willing to.
We are still witnessing high numbers of buyers walking through open for inspections and also large numbers attending auctions. I believe there are many buyers out there who are currently sitting on their hands waiting to see what happens with interest rate rises and property prices. We know it is likely there are more interest rate rises to come, but once these rises slow down and then cease, it is likely the dormant buyers will come back into the market and be willing to purchase.
1/50 Grant Street, Malvern East went to auction on Saturday which is a well located, three bedroom, one bathroom villa unit in good condition. The property was quoted at $1,050,000 to $1,150,000 prior to auction. Five bidders in total participated in the auction where the property was announced on the market for $1,210,000 and sold for $1,363,000.
In Geelong, the auction of 15 Sanglen Terrace, Belmont attracted a large crowd with the four bedroom, two bathroom, two car updated family home quoted at $900,000 prior to auction. Bidding commenced at $950,000 with four bidders in total pushing the price to $1,055,000.
Have a great week.
Kim Easterbrook
The clearance rate moved back into the 70%’s over the weekend with 546 auctions reported to the REIV. 316 properties sold at auction, 67 before auction and there were an additional 276 private sales.
All eyes will be on the Reserve Bank of Australia with their monthly meeting scheduled for tomorrow. Opinions are divided as to whether there will be a 0.25% or 0.5% rate rise tomorrow with some predicting the rise to be 0.5% tomorrow and then the rises scaling back. It seems we are already seeing some relief to cost of living with some prices coming back down on the supermarket shelves but unfortunately fuel excise will go back to normal rates at the end of the month which means we will be paying for more at the petrol pump. Any real impant of interest rate rises has a lagging affect and therefore, it is believed the RBA will take the foot off the pedal to monitor the overall impact in the months ahead.
The RBA cash rate is currently sitting at 1.85% which is still resulting in cheap money for homebuyers. Over the past few weeks, we have seen a significant positive shift in the confidence of buyers and as a company we have had an increase in new buyer enquiry and willingness to transact. Many buyers are factoring in these interest rate rises within their budgets and adjusting accordingly. Banks are also factoring higher interest rates in the amount they are prepared to lend property buyers.
Spring is gearing up to be an active few months with predictions of stock levels rising but also a rise in buyers in the market. There still could be a two speed market with A grade properties (properties with limited compromises) selling extremely well under strong competition and properties that have compromises (being unrenovated, poorly located and having inferior floor plans), having limited buyer interest.
The auctions we attended on the weekend were mostly competitive with one of them being 1/1 Bowen St, Malvern East. The single level, three bedroom, two bathroom, double garage modern townhouse was extremely popular with buyers and the agents were reporting large numbers through each of the open for inspection. The property was quoted at $1,000,000 to $1,100,000 prior to auction but mid campaign, due to the interest the price quote was increased to $1,100,000 to $1,200,000. 7 bidders in total with some not even getting the opportunity to put their hand up (buyers being a mixture of downsizers and young families) drove the price to $1,410,000 which was $310,000 over reserve. The closest comparable sale was $1,353,000 which was the rear townhouse which was identical in size and condition and that property sold in April 2022.
Have a great week.
Kim Easterbrook
The auction clearance rate dropped back into the 60%’s on the weekend with 518 properties going under the hammer. 279 sold at auction and 67 sold before auction resulting in a clearance rate of 67%. There were an additional 250 private sales.
There is no doubt we have seen the property market stabilise and we have not experienced the decreases in property prices that many ‘so called’ experts first predicted. However, we are very much in a ‘two speed property market’ where some properties are selling much higher than expected, and then others are selling less for or exactly what the property is worth. There seems to be an inconsistency in the final result in which some cases results in the buyer doing well in their purchase, and then in some cases the vendor has achieved a high sale price. More records are being broken with a house in Bentleigh achieving the highest price for a residential house sold over the weekend.
Generally speaking, properties that are well located, updated and have a good floorplan are selling well under competition from multiple buyers. These properties have also been marketing correctly which means presented immaculately and priced accurately online. Other properties that are compromised such an being unrenovated, poorly located, inferior floorplans or not presented well are the ones that tend to be struggling. Buyers are still circling these properties but often waiting for them to pass in at auction, sticking to firm budgets when negotiating and making offers with ‘subject to finance clauses’.
I attended an auction yesterday at 1/21 Turner Avenue, Glen Huntly where there would have been almost 100 people in attendance. The three bedroom, two bathroom single level townhouse is well located, dated but immaculate and styled well with hire furniture for sale. The bidding was slow to start though with the auctioneer kicking off the auction with a vendor bid of $950,000. However five bidders participated with the buyers being a mix of first home buyers and downsizers. The property was quoted $995,000 to $1,090,000 prior to auction and sold for $1,190,000.
Have a great week.
Kim Easterbrook
Hi,
The auction clearance rate for the second week in a row achieved in the 70%’s but the positive news is that it was on a higher number of auctions. 480 auctions were reported to the REIV over the weekend resulting in a clearance rate of 71%. 262 properties sold at auction, 79 before auction and there were an additional 158 private sales.
Whilst there seems to be an improvement in sentiment in the property market, the news headlines last week were abuzz with two properties that had sold in St Georges Road, Toorak which both had broken the previous Victorian house price record. 17 St Georges Road, Toorak, an unrenovated house with a heritage overlay set on a battle axe block of land 7,800 sqm is currently under offer for close to $75m. Up the road at 29-31 St Georges Road, I was privileged to represent the buyer in purchasing what we classed to be ‘the best block of land in the state’. The ‘Ghost House’ as it has been called for many years, is a derilict house that Hoyts boss Leon Fink started building before the recession hit in the 1990’s where he sold it unfinished and the property has not been touched ever since. The land, which is almost 7,200 sqm with no heritage overlay, regular shaped, on the premium side of the street and was an extremely rare proposition. Many properties within this location have a heritage overlay and there are only a handful of this size. We successfully bought the property (under competition from another buyer) for just a tad over $80m.
Putting these two sales aside, there definitely feels like there has been a positive shift in the market which is good news heading into Spring. Again, the open for inspections we attended were crawling with buyers and the clearance rate appears to be slowly climbing back up. The sentiment is suggesting we should have an active spring from both buyers and sellers and property prices should hold firm, some are even suggesting that we may have already hit the bottom of the market.
2/44 Faversham Road, Canterbury went under the hammer on the weekend and is a three bedroom, two bathroom, two car (double garage) unrenovated townhouse on 502 sqm of land was a very competitive auction. The property was first quoted for $1.12m to $1.22m and then the range lifted to $1.25m to $1.35m due to the high interest in the property. Bidding started at $1.3m and got to $1.65m in less than a minute. 4 bidders all up (with many did not even get their hand up) with the successful bidder jumping in at $1.8m and buying the property at just over $1.9m.
Have a great week.
Kim Easterbrook
Hi ,
There was a slight improvement on the clearance rate over the weekend although the amount of auctions decreased. 387 auctions were reported to the REIV resulting in 215 selling at auction, 60 selling before auction and 112 passing in. There were an additional 183 private sales.
The final clearance rate result last week was 68% on a higher volume weekend of 509. The clearance rate has stabilised well and truly into the mid to high 60%’s and the drop in auctions over the weekend pushed it back into the 70%’s.
There sentiment in the property market seems to be a little bit more positive than it was a couple of months ago. More bidders at auction, people willing to transact and many open for inspections are attracting good numbers. The reality is that people still need shelter and there will always be a demand for housing. If someone is buying and selling in the same market at the same price point, then there really shouldn’t be a negative or positive effect. Somebody who is upsizing could benefit with a larger discount on the upgrade but someone downsizing may hold off until the market conditions are more favorable.
Buyers are now fully aware that interest rates are rising and there are potentially more to come. Many buyers are factoring these interest rate hikes into their budgets, but also the banks are also factoring the new interest rates in when calculating people’s borrowing power. Whilst there are buyers on the sideline not acting, there are certainly some buyers who are willing to transact and we are still seeing some strong sales results on properties.
One example of a strong result was a property that sold last week in Elwood. Located in one of the the best streets, the three year old house on 515 sqm had four bedrooms, four bathrooms and a double garage. The property was quoted at $5,750,000 – $6,100,000 via an Expressions of Interest campaign and sold in the vicinity of mid $6,000,000’s (price undisclosed).
Have a great week.
Kim Easterbrook
