Happy New Year!  Myself and the team at Elite are all back in the office and looking very much forward to a busy 2022.  Hopefully you have had a great start to the year.

The property market is starting to wake up and auctions returned over the weekend with 598 auctions reported to the REIV producing a solid but expected clearance rate of 82%. In addition, there were 709 private sales.

Whilst activity in the real estate market has commenced, it hasn’t been without disruptions and one could argue it has been a slow start to the year already.  It seems some people (potential vendors) took extended holidays due to the inability to have holidays in previous years which has delayed some properties coming onto the market.  Also there have been further delays due to the explosion of Covid case numbers with many people having to isolate at home and therefore making it impossible for selling agents to inspect properties to conduct sales appraisals.

We have learned to live like this for the past couple of years so it has done little to affect confidence in the property market, but it does make us realise that we could be in for another year of disruptions and no doubt properties with live campaigns may be forced to pause mid campaign due to occupants of the property having contracted Covid.

Domain have released their December 21 quarter median house price data with it showing that Melbourne’s property prices increased 5.8% to an all time high of $1,101,682.  Although, personally I felt there was a little slow down in the property market in December last year, there was no doubt some significant growth in October and November and therefore their data appears accurate.  Their data also showed an increase in property prices of 18.6% over the year and whilst this growth rate is not sustainable, with stock levels still on the low side and lot of confidence in the market, the signs are there that we should see some further growth in property prices throughout the year.  Interestingly, the median house price in Sydney is $1,601,467 which is considerably higher than Melbourne however Melbourne is predicted to have stronger population growth over the next five years so the price gap between the two capital cities could become smaller.

With most people back from holidays, the amount of properties on the market will start to rise.  If all things remain as they are now, we should be in for a very active six months in the real estate market across the board.

Have a great week.

Kim Easterbrook

There was another high auction volume weekend with 1,139 auctions reported to the REIV producing a clearance rate of 75% (same as last week).  591 properties sold at auction, 258 before auction and there were an additional 257 private sales.  The 75% clearance rate is a welcome relief to buyers (possibly only short term) as the heat in the property market eases.

The Australian Government Centre for Population released data last week predicting that Melbourne’s population is set to overtake Sydney within the next five to six years.  This is earlier than what was originally predicted, even with the pandemic hitting.  They have predicted that Melbourne will bounce back from the lockdowns quickly and population will start to rise again.  They also highlighted the huge property affordability issues in Sydney as one of the main drivers for the population growth.  This also should have a flow on effect into the larger regional towns of Victoria, for example, Geelong, Ballarat and Bendigo.  In due course, these population growth figures could add some further pressure on property prices, even with the predicted interest rate rises to come in a couple of years.

There has been some extraordinary sales in Albert Park over the past couple of months and another property went under the hammer on Saturday which sold well above the reserve price.  20 Moubray Street, Albert Park is a renovated, 4 bedroom, 2 bathroom, 1 car park, double fronted period home on 360 sqm of land.  The property was quoted $6,000,000 to $6,600,000 prior to auction.  Six bidders participated in the auction with the opening bid at the top of the quoted range.  The property sold for a huge $9,175,000 which was well above the vendors expectations.

Over in the western suburbs, 30 Coral Avenue, Footscray went under the hammer and was hugely contested with first home buyers being the main demographic wanting to secure the property.  Four bidders participated in the auction with the property selling for $1,216,000 which was well above the $1,095,000 it sold for in January this year.

This is the last market wrap for 2021 and from the whole team of the Elite, we wish you a very happy holiday season and we can’t wait to see you in 2022.

Kim Easterbrook

The clearance rate dropped to 75% over the weekend as a result of the increase in properties on the market.  1,116 auctions were reported to the REIV on the weekend with 600 selling at auction, 273 before auction, 1 after auction, 292 passed in and there were an addition 248 private sales.  Last week’s final results were 1,369 auctions producing a 79% clearance rate.

The current increase in properties has resulted in some hope for buyers that we are entering a more ‘balanced’ market where there are more properties on the market to assist balance out the demand.  Whilst that is welcoming news to buyers, we are still seeing some properties achieving big prices under solid competition from buyers.   We only have a few more weeks of stock levels until it significantly drops as we enter into the holiday period.

A huge auction at 76 Armstrong Street, Middle Park on the weekend which was a fully renovated, four bedroom, three bathroom period home on 650 sqm.  The price guide prior to auction was $8,000,000 to $8,800,000 but that was no guide for the bidders with the opening bid being $9,550,000 which was $750,000 above the top end of the range.  Two other bidders participated but it was the opening bidder who took home the keys for $9,800,000.

15 Thompson Street, Ormond was another auction that was hotly contested with the five bedroom brick home smashing its price guide of $2,100,000 to $2,300,000.  The property does have a unique design but still requires work.  It is located within the McKinnon High School zone which also added to the demand for the property.  The property sold for $2,880,000 at auction over the weekend.

Have a great week.

Kim Easterbrook

Hi ,

The weekend’s auction numbers were strong with 1,038 auctions reported to the REIV.  580 sold at auction, 244 before auction, 4 after auction and there were an additional 213 private sales recorded.  The overall clearance rate was 80% and the final clearance rate for last week is sitting at 82%.  There are over 1,000 auctions scheduled next weekend.

The next two weeks are likely to be the final two weeks of new auction campaigns for 2021 and then we will head into a market of private sales and off market properties with at least a two to three week break over Christmas.

The ABS released their September quarter data and it looks like it is going to get harder for some buyers to enter the property market with the ABS releasing the wages growth for the year to September quarter being only 2.2% and 0.6% for the quarter.  Wage growth is expected to rise over the next twelve months with staff shortages being reported across many different industries.  However, this wages growth will not be anywhere near the rate that property prices have increased over the past twelve months with prices rising from 20 to 30% in the major capital cities and some regional areas and predictions that property prices will further rise again next year.

A four bedroom, three bathroom townhouse at 18A Sea Parade, Mentone went to auction over the weekend with an agent price guide of $1,650,000 – $1,750,000.  The auction was well attended with four bidders participating in the auction.   The property was announced on the market at $1,860,000 and sold for $1,893,000.

A two bedroom apartment at 13/38 Northcote Road, Armadale went under the hammer and was highly sought after by first home buyers.  The property was quoted at $600,000 to $650,000 prior to auction with the last two bedroom apartment in the block selling for $665,000 in January 2021.  The property was announced on the market at $650,000 but bidding soared past this to sell for $711,000.

Have a great week.

Kim Easterbrook

Hi ,

The clearance rate remained steady over the weekend at 82% on 1,052 auctions reported to the REIV.  606 sold at auction, 260 sold before auction, 1 sold after auction and 185 passed in.  There were an additional 229 private sales recorded. The final number of auctions reported last week was 1,126 resulting in a clearance rate of 81%. These volumes are very consistent with a usual Spring period and the clearance rate has ever so slightly dropped as a result.

The increase in stock levels have contributed to some of the heat being taken out of the market.  That being said though we are still seeing some strong results on properties but these are becoming fewer.  Demand for family homes is still very high due to the toll of lockdowns still heavily in the minds of buyers wanting more space with extra accommodation, home offices and bigger backyards.  As we head into Christmas, the amount of properties on the market will start to decline again so this relief in the market might only be very short term.

It appears that the Mornington Peninsula property market has turned a corner with a drop in median house price in the September quarter of 0.6 per cent which is the first time prices have declined/stabilised since December 2018.  Whilst there is still prediction of growth to occur, the growth rates will be at lower levels (the growth rates for the past two years are not sustainable).

124 Harcourt Street, Hawthorn East went to auction on the weekend and was in demand.  The property is well located, offered lots of accommodation, was updated and as a result buyers were prepared to bid strongly to secure it.  The bidding commenced at $3,700,000 but quickly jumped to $4,000,000 (close to the reserve) but bidding was fierce with the property selling for $4,700,000 which was almost $700,000 over the reserve price.

An Albert Park home sold for over $1,650,000 over the reserve price with 53 St Vincent Place going under the hammer.  A large crowd attended the auction, with the renovated period home having a price guide of $8,000,000 to $8,800,000 prior to auction.  The property was announced on the market at $9,500,000 but likely to have hit the reserve prior to this announcement with the property selling for $11,110,000.

The inner north market has been very strong for the whole of 2021 and the auction of 80 Union Street, Brunswick was strongly contested by 5 bidders.  This unique corner shop which has been converted into a residential home (in need of an update though) had a price guide prior to auction of $1,700,000 to $1,730,000.  The property was announced on the market for $1,730,000 but bidding did not stop there with the property selling for $1,961,000.

Have a great week.

Kim Easterbrook

Hi ,

The clearance rate has been remaining steady with 852 auctions being reported to the REIV achieving a clearance rate of 82%.  483 properties sold at auction, 213 before auction, 1 after auction and 155 properties passed in.  We have three to four more weeks of new auction campaigns before the market starts to wind down for Christmas. This is when we will expect off market activity to rise and new listings advertised as private sale campaigns.

The Reserve Bank met last week and again kept interest rates on hold however they did mention the plan to not increase interest rates until 2024 might be brought forward if wages growth and inflation exceeded its current expectations.  The RBA is likely to use a wait and see approach as we are still entering into the unknown of whether Australia could be hit with a new Covid-19 variant or the take up of booster shots in the future.  It is looking unlikely that interest rates will be used as a tool to ease property price growth.

The majority of auctions are now back onsite with most of them performing well over the weekend.  I don’t believe we are seeing the same heat in the market that we did earlier this year, however we are still witnessing active strong bidding and many auctions producing strong results.

6/50 Fewster Road, Hampton is an updated two bedroom villa unit with a large floor plan and reasonably sized courtyard.  High quality, single level villa units are highly sought after from first home buyers, investors and downsizers and also rent out very well in comparison to some other asset types.  The auction attracted bidding from three parties and was quoted $780,000 to $830,000 prior to auction.  The bidding opened up at $840,000 but was not announced on the market until $860,000 where another bidder jumped in.  The property sold to the first bidder for $920,000.

A huge result occurred in Albert Park with a four bedroom home located in beautiful St Vincent Place sold for in excess of $2,000,000 above the reserve.  The property, whilst liveable will probably undergo an upgrade by its new owner and is situated on 506 sqm of land attracted three bidders at auction. It was down to two parties from $10,500,000 who both really wanted to secure this rare piece of real estate.  The property sold for $11,110,000.

Have a great week.

Kim Easterbrook

Hi ,

Auction numbers are rising to levels close to what a normal Spring season should be with 968 auctions reported to the REIV over the weekend. The property market remains strong with the clearance rate hitting 90% over the weekend. 575 sold under the hammer, 292 sold before auction, 8 after auction and there were an additional 193 private sales.

Premier Daniel Andrews announced yesterday that Victoria (as a whole) will move to Phase C of the National Plan due to 80% of 16 plus being fully vaccinated.  From what we understand, open for inspections for properties up for sale and lease will be allowed to return from 6pm on Friday for fully vaccinated people only (this includes staff).  Private inspections will be allowed for people who are not fully vaccinated or partially vaccinated.

Onsite auctions have already resumed with 50 fully vaccinated people allowed to attend onsite.  These will be allowed to continue with bigger numbers from this weekend but again, only for fully vaccinated people.  The selling agents will breathe a sigh of relief by no longer having to stand outside properties for hours on end.  These changes may start to normalise this fast-paced property market that we are currently in.

111 Ludstone Street, Hampton went under the hammer over the weekend and was in very high demand.  The unrenovated, 5 bedroom, 2 bathroom home on 683 sqm was quoted at $1,900,000 prior to auction but the end sale price smashed this.  Four bidders drove the sale price to $2,620,000 which is significantly above the last unrenovated home that sold in the street in May for $2,050,000 which was on larger land of 794 sqm but on the south side of the road.

51A Durham Road, Surrey Hills was also another popular property at auction.  The semi-detached house was quoted $1,600,000 – $1,700,000 prior to auction and the agent received an offer of $1,788,000 mid-campaign and rightly raised the quote range to reflect the rejected offer.  The auction was competitive with three bidders driving the end sale price to $2,170,000.

Have a great week.

Kim Easterbrook

Another big online auction weekend with 960 auctions being reported resulting in a clearance rate of 89%.  557 sold at auction, 287 sold before auction, 6 sold after auction and there were an additional 278 private sales.  Last week the end result was 1,140 auctions report with a clearance rate of 86%.

For me, personally, I don’t think I have worked in a real estate market that is running as fast as this one.  Properties are selling quickly, many before auction, vendors are motivated to sell if they achieve the price they are hoping for and buyers are mostly paying these prices.  We are not seeing the steep incline in prices that we saw after lockdown 2.0 however we are still experiencing strong sales results, multiple offers/bidders and properties selling quickly.  Many selling agents are also tired of one on one private inspections with them having to stand outside properties, in the cold, wet weather for hours on end.  This is also resulting in some selling agents encouraging vendors to take offers before auction.  We are aware of one Bayside agency who had 9 auctions scheduled for last Saturday in which 7 had sold prior to auction.

I spoke with Chris Devlin from Quora Financial last week to get his take on the changes in the APRA lending regulations and what impact will this have on lending.   Effective from the 1st of November, he mentioned that lenders will increase their rates on their servicing calculator, which means if a lender offers you an interest rate of 2%, the bank will use an interest rate of 5% for their servicing calculator.   The reasons behind doing this is to ensure that their customer is not sensitive to interest rate rises and to assist tackling property market inflation.  Current pre-approvals issued prior to November 1 will be honoured provided there has been no material change when the client purchases their property.  Existing pre-approvals can’t be extended without applying the new servicing criteria.

A property in Toorak sold last week which has become the most expensive house in Australia to sell at auction.  47 Lansell Road, Toorak was listed at $40m to $44m and was to be sold via an Expressions of Interest campaign.  However, there were two interested parties so the property ended up going to auction and the price achieved is undisclosed but it was record breaking.

Have a great week.

Kim Easterbrook

It was the biggest online auction weekend we have had yet in Melbourne, with 897 auctions being reported to the REIV achieving a clearance rate of 86%.  The same time last year there were only 46 auctions.  233 properties sold before auction, 533 sold at auction, 2 after auction and 129 passed in.  There were an additional 206 private sales.

Last week, APRA made the first change to lending criteria in an attempt to slow down rising property prices.  However it seems they are going with a softly, see how it goes strategy, rather than being too heavy handed and potentially bringing the property market to a grinding halt..  On Wednesday, APRA increased their loan serviceability rate ‘buffer’ from 2.5% to 3.0% which is expected to reduce borrowing power by around 5%.  It was predicted they would tighten debt to income ratio which at this stage has not occurred.  When a bank assesses the ability for a borrower to repay a mortgage, they calculate the repayment with the current interest rate plus a ‘buffer’ which is the number that has been increased.

The online auctions we attended over the weekend were all competitive with multiple bidders and all selling under the hammer.  The auction of 364 Dorcas Street, South Melbourne opened up on a genuine opening bid of $1,200,000 and was announced immediately on the market.  The auction continued with a flurry of bids before selling at $1,471,000.  A big price considering the house has not been structurally renovated, land size is 128 sqm and there are traffic lights and intersection right at the front door.

The upsize market continues to be strong with 62 Tranmere Avenue, Carnegie selling competitive on the weekend.  There were seven bidders registered with three competing for the keys.  The price guide of the five bedroom, three bathroom home was quoted at $1,850,000 and $1,950,000 with the property being announced on the market at $2,030,000 and selling to a family for $2,060,000.

The Geelong market continues to go from strength to strength and the auction of 7 Hume Street, Grovedale was heavily contested.  6 bidders in total including 3 buyer’s advocates.  The property was quoted $639,000 – $689,000 prior to auction, announced on the market at $705,000 and sold for $795,000.

Have a great week.

Kim Easterbrook