Hi,
Last weekend was set to be Melbourne’s second biggest auction weekend of the year, with over 1,400 auctions booked in. However, the real estate industry was thrown into chaos on Thursday with the announcement of lockdown 4.0. As a result, many properties were sold before auction, auctions were being postponed, others converted to online auctions and some changed to private sale.
In the end, 724 auctions were reported to the REIV resulting in a clearance rate of 93%. This clearance rate is not accurate due to the amount of postponed and withdrawn auctions. However, what it does tell us with the ones that still proceeded to auction, most sold.
Victorian’s have had to deal with so much over the past 14 months but one thing is for sure we have become great at adjusting to lockdowns at short notice. The industry is still able to operate but only in the comfort of our own homes. No open homes or private inspections are allowed and that includes for both selling and renting and only services relating to property settlement or commencement/end-of-lease (including removalists) are permitted.
Lockdown also did not stop some strong auction results with a house in Brighton East selling $560,000 above reserve. 9 Stone Street, Brighton East is a five bedroom, three bathroom period home on the non-beach side of Nepean Highway. Six bidders participated in the online auction with the property selling for $3,060,000.
Quality villa units continue to be in strong demand. 4/204-205 Beach Road, Mordialloc had 8 parties attend the online auction. A strong opening bid of $960,000 knocked most of the bidders out and two bidders went back and forth until it sold for $1,010,000.
Have a great week.
Kim Easterbrook
Hi,
Melbourne’s auction clearance rate remained consistent over the weekend with 934 auctions reported achieving a clearance rate of 81%. 760 properties sold, 174 passed in and there were an additional 193 private sales.
The consistent high auction weekends have bought more choice to keen buyers which has resulted in a more balanced market for buyers and sellers. The fierce panic in the market seems to have faded with more buyers willing to wait until their ideal property comes onto the market. That being said, many properties are still selling well but with less bidders per property and fewer run away results than we were experiencing a couple of months ago.
One of the last remaining large parcels of land went to auction in Box Hill on the weekend. The block was 1,632 sqm and was quoted conservatively for $3,000,000 to $3,300,000 prior to auction. Four bidders pushed the property well passed this where it was announced on the market at $3,725,000 and sold for $4,062,000.
A house in Spotswood had huge competition at auction with an advertised vendor’s reserve prior to auction of $950,000. The house flew past this price within two bids with a mix of buyers from investors, first home buyers, families and downsizers trying to secure the home. The property sold for $1,200,000.
Have a great week.
Kim Easterbrook
Hi Nikki,
Another high volume auction weekend with 978 auctions reported to the REIV achieving a clearance rate of 82%. 806 sold at auction, 172 passed in and there were an additional 159 private sales.
Over the weekend, the Victorian Treasurer Tim Pallas announced that stamp duty on property and land taxes will rise effective from the 1st of July as part of the this week’s state budget.
The new changes will include an increase in stamp duty for purchases over $2,000,000 which will include the normal $110,000 payable upto $2,000,000 and then changing to 6.5% over $2,000,000. On a $3,000,000 purchase the stamp duty will now be $175,000 which is an increase of $10,000. Whilst a lot of money, probably not enough of an increase to stop buyers from purchasing at the higher end.
Land tax is also proposed to be increased by 0.25% for taxable land holdings from $1,800,000 to $3,000,000 and 0.30% for taxable land holdings above $3,000,000. If you have taxable land holdings (and this does not include your Principal Place of Residence) of $3,000,000, the current rate of land tax is $24,975 and the new proposed amount would be $27,975 which is an increase of $3,000 per year.
Whilst these increases are designed to target higher income earners, I don’t believe it will be enough to stop an owner occupier buying their ideal home but it may impact the amount of properties an investor purchases in Victoria. That being said, the majority of property investors only hold one or two investment properties at any one time.
Developers and investors owning properties that are rezoned are also being targeted with a 50% tax if the gain is over $500,0000.
Despite the freezing conditions, the weekend’s auctions were active and open for inspections were busy. Some even reporting lines up down the road, quite a feat considering the arctic blast Melbourne was experiencing.
1/3 Wilkins Avenue, Beaumaris – last sold for $552,500 in 2012 went under the hammer over the weekend with three bidders participating in the auction. The property was announced on the market at $1,050,0000 and sold for $1,115,000.
17 Capulet Street, Moonee Ponds was popular with families producing 4 bidders at the auction. The property was quoted $1,425,000 to $1,525,000 but sold well above this under the hammer for $1,705,000.
2/1163 Dandenong Road, Malvern East achieved a surprising result for a main road location. Villa units in quality suburbs are in high demand and this three bedroom, one bathroom property was no exception, 6 bidders in total property achieving a result 25% above the top of the quoted range of $1,093,000.
Have a great week.
Kim Easterbrook
Hi,
There was a Super Saturday in Melbourne over the weekend with 1,019 auctions reported producing a clearance rate of 81%. 623 properties sold under the hammer, 192 sold before auction and 195 passed in. There were an additional 204 private sales.
The Australia Bureau of Statistics released data showing new home loans surging to a record high in the month of March (an increase of 5.5% over the month). The data showed that investors had the largest increase (which is consistent with the new enquiry we are receiving in our office) but worryingly that first home buyer approvals have dropped.
Interestingly, what this does demonstrate is that there are still a lot of buyers wanting to enter the property market and have only just started the process. Price growth does seem likely for quite some time to come whilst interest rates remain low and confidence is high. However, the rate of price growth is stabilising which is not unexpected as an increase of 8.8% in one quarter is not sustainable. It seems the ‘fear of missing out’ is easing.
The auction of the property at 10 Hardinge Street, Beaumaris was competitive with seven bidders trying to secure this land site. The demand for houses in Beaumaris has increased dramatically due to the new Beaumaris Secondary College school zone. The deceased estate was quoted for $1,550,000 to $1,650,000 prior to auction with the knock down selling for $2,035,000.
1572 High Street, Glen Iris sold well above reserve with just the two bidders participating at the auction. A strong opening bid knocked out some potential purchasers but was challenged with the property selling for $3,001,000 which was more than $400,000 above the reserve price.
Have a great day.
Kim Easterbrook
Hi,
There were 970 auctions held over the weekend resulting in a clearance rate of 81% according to the REIV. 609 sold at auction, 179 sold before auction and there were an additional 210 private sales. The clearance rate for houses was 84% with a median price of $1,200,000 and apartments achieved a 76% clearance rate with a median price of $771,000. Interestingly, this time last year there were only 96 auctions held.
Many experts are expecting property price growth to continue this year and further beyond. This is all happening without population growth which is not expected to increase again for another two years. Our employment growth has been better than expected, coupled with low interest rates, strong consumer confidence and many people have actually been able to save quite a bit of money over the past twelve months, this has all contributed to an increase in demand.
It seems APRA and the Reserve Bank are more interested in financial market stability, promoting growth in economic activity and lending regulations than property prices at present, so it doesn’t appear that any intervention is on the cards in the immediate future.
The weekend auctions we attended were once again competitive with multiple bidders and all auctions selling under the hammer.
The auction of 1/7 Crawford Road, Cheltenham produced a higher than expected result. Entry level houses/units for good quality suburbs are currently in strong demand. This three bedroom, two bathroom, one of two home attracted three bidders at auction. The opening bid of $1,050,000 was quickly trumped by another bid of $1,200,000 where the property was announced on the market. Two bidders then went head to head where the property sold for $1,325,000.
17 Leroux Street, Oakleigh had a lot of interest with land sites with development potential continuing to be in strong demand. This property is on 702 sqm with a rentable, original house on it. The property was quoted $1,050,000 to $1,150,000 prior to auction. There was a large crowd in attendance and five bidders in total (with some not even having the opportunity to put their hand up). The property sold for $1,387,000.
Have a great day.
Kim Easterbrook
Hi,
There were fewer auctions over the Anzac Day weekend with 704 reported to the REIV producing a clearance rate of 80%. 566 sold at auction, 138 passed in and there were an additional 183 private sales. We will have five weeks straight of high auction numbers before the Queen’s Birthday weekend with the 1st of May being a super Saturday (a weekend with more than 1,000 auctions scheduled).
Family homes have been performing very well at auction with many producing results well above their reserve prices. There are examples of this all over Melbourne and regional Victoria as buyers upgrade for more space. Some family home buyers are looking for bigger backyards and a home office (or extra bedroom) as a result of spending more time at home last year and changes to the way we work.
The auction of 14 Landcox Street, Brighton East had four bidders wanting to secure the five bedroom, four bathroom period home on over 1,000 sqm. The property was quoted $3,200,000 to $3,225,000 and sold for $3,503,000. Buyers were drawn to the substantial land size and the number of rooms the property had, even having a fully self-contained studio at the rear.
36 Stuart Avenue, Cheltenham was very popular with buyers due to the entry level price point for a house beach side of the highway. The three bedroom, two bathroom, orange brick home was quoted $1,300,000 – $1,350,000 before auction. A flurry of bidding pushed the price well above the reserve price selling for $1,663,000.
The auction of 67 Deep Creek Drive, Doncaster East (a large four bedroom, three bathroom home on 1,600 sqm) had five bidders. The property was declared on the market at $2,700,000 and sold for $3,050,000. The property had a swimming pool, a tennis court, four bedrooms, three living areas and a home office.
It is not unusual for properties to be selling 10% to 20% above the advertised prices in the current market. This is mostly not due to underquoting as such, but from strong buyer demand pushing the prices well above the agents estimated selling range and vendor’s reserve prices.
Have a great week.
Kim Easterbrook
Hi,
There were 922 auctions reported to the REIV weekend producing a strong clearance rate of 86%. 623 sold at auction, 169 sold before auction and in addition there were 207 private sales.
Active bidding, large crowds, reserves were smashed and whilst we thought a slow down in growth was in sight, the results from the weekend demonstrated this may not be the case. There is high interest from buyers across the board from investors, first home buyers, upsizers, downsizers, renovators/developers with pressure on prices at all price points.
Land sites for buyers looking to build large family homes are in high demand, 13 Mangan St, Balwyn sold at auction on the weekend for $3,381,000 with five bidders trying to secure the land site. The price quoted was $2,800,000 to $3,000,000. Another land site at 3 Bay Street, Parkdale sold for $2,575,500 on an agents price guide of $1,950,000 to $2,145,000. Whilst some agents price guides are low, reserves generally speaking have not been too far from the top of the range. It is the buyer competition that is pushing prices to these levels.
The REIV released their quarterly data last week which showed property prices increased by 8.8% in Melbourne, resulting in the Melbourne median house price surpassing the $1 million mark for the first time. The house prices in regional Victoria increased by 4% which equates to 12% growth for the year and 19% for units. The median unit prices across Melbourne increased by 5% for the quarter.
The amount of transactions for the quarter reached 35,000 which is the highest in six years. We are still playing a lot of catch up from last year however no one could have predicted the level of interest property has received this year.
Have a great week.
Kim Easterbrook
Hi,
A huge amount of properties went under the hammer over the weekend achieving a clearance rate well in to the 80’s again for many weeks in a row. 1,451 properties went to auction over the weekend, with 964 selling at auction, 270 selling before, 1 sold after auction and 216 passed in. In addition, there were 208 private sales.
In comparison, this time last year there were 1,161 auctions achieving a clearance rate of 90% and was the last weekend before Covid cases started to rise in Australia and fear started to set into property buyers.
Strong price growth is expected for the March quarter with no slow down in sight. Huge crowds attended auctions on the weekend with many auctions experiencing strong bidding from multiple parties.
Australia’s population growth declined to its slowest rate in almost 15 years with negative net overseas migration and a drop in the national fertility rate. It is expected that the population growth will remain low to negative for quite some time to come, but, when international travel is allowed again, overseas migration will start to rise and population will start to grow again. This could put further pressure on property prices.
10 Rowe Street, Fitzroy North sold on the weekend for $915,000 above its reserve price. The unrenovated, three bedroom hawthorn brick home was quoted $2,600,000 to $2,860,000 before auction. The first opening big was $3,000,000 and the property was immediately announced on the market. The price soared from there selling at $3,915,000 which was over $915,000 above reserve.
2/48 Argyle Avenue, Chelsea had a lot of interest from first home buyers, investors and downsizers. This large two bedroom, two bathroom villa unit was quoted $595,000 to $650,000 prior to auction. Strong bidding from six parties (with many not getting the opportunity to put their hand up) resulted in the property selling for a whopping $850,000. Quality villa unit prices have historically grown strongly and due to the entry level price point for these properties, we believe prices will continue to keep growing.
Have a great week.
Kim Easterbrook
Hi,
There were 943 auctions on the weekend resulting in a clearance rate of 83%. Of the 943, 631 sold at auction, 154 before auction and there were an additional 201 private sales. Next weekend will be a Super Saturday with over 1,000 auctions and once again, the clearance rate should reach into the 80%’s.
According to CoreLogic, the Melbourne’s housing market rose 2.1% in February and was one of the strongest performing markets in the country, just behind Sydney and Hobart which experienced price growth of 2.5% over the month. Regional Victoria also experienced strong growth of 2.6% for the month and an overall price growth of 6.2% over the past 3 months. Houses in Melbourne are once again are outperforming units with overall price growth of 2.4% and units at 1.2%.
The amount of properties on the market has increased which has resulted in a healthy amount of transactions. However, if you speak to any buyer looking to purchase, they might argue that there is still a lack of quality stock to choose from.
Over the past six months, the amount of off market transactions has decreased inline with declining Covid-19 cases and auctions performing well. I am expecting this to change over the next few months as a result of the amended Residential Tenancy Act. Whilst some of these changes are long overdue, some of the requirements to get properties to a standard required by the Act may just be enough to push an investor to sell. Last year was no doubt a tough year for the rental market with some landlords having difficulty leasing out their property (although we have seen some recovery so far this year).
For this reason, we should see a small rise in off market activity as some landlords will sell their property with a tenant in place. The reason why a landlord will sell this way is that the property has not been styled/presented for sale and the buyers who inspect will need to be well qualified and educated to see through this.
Have a great week.
Kim Easterbrook
Hi ,
Masks were off over the weekend and bidding was fierce at some auctions. The REIV clearance rate was 84% on 937 auctions. 592 sold at auction, 195 sold before auction and there were an additional 194 private sales.
There is a huge interest in property at the moment, not only in Melbourne but across the state. The after effects of multiple lockdowns have seen many people rethink their way of living. The number of vendors selling due to a seachange or treechange has increased dramatically. On the flipside though, we have also experienced high level of enquiries of expats wanting to buy a base in Melbourne with a view of coming home over the next couple of years. There has also been an influx of Sydney buyers wanting real estate in Melbourne or Regional Victoria (mainly Geelong and Ballarat).
The demand in the upsizer market is putting strong pressure on the housing market, this has been caused by a large number of people rethinking about the type of property and space they need due to spending so much time at home over the past twelve months. Extra bedrooms, study’s and reasonable sized backyards are on the wish list to allow more flexibility to work from home and space for children to run around.
Over the weekend, there have been many reports of properties selling well above the advertised price range and the vendors reserve. While some of this has been caused by the increase in buyer demand, I do believe that some advertised price ranges are low and not in line with current market value. This is mostly not due to the agent under quoting the property, rather than vendors having extremely realistic reserves and at levels where prices were last year. Over the next few months that gap should decrease as vendor’s expectations start to rise due to the rising market.
The auction of 20 Cowper Street, Sandringham was of interest to many buyers. The property was a three bedroom, two bathroom original mid-century home on approximately 390 sqm of land. The appeal of the property was the location and the architectural uniqueness of the home. The property was quoted for $1,300,000 to $1,400,000 in the first week of the campaign but due to high interest levels was raised to $1,500,000 to $1,600,000. The property was announced on the market at $1,650,000 but what was interesting was the level of interest above this. There were still five bidders above $1,900,000 and three bidders above $2,000,000. The property sold for $2,105,000 to what appeared to be an owner occupier.
Another rare property to sell well above reserve was 15 Waltham Street, Flemington. The Victorian home on 500 square metres was hugely popular with the opening bid of $2,000,000 exceeding the reserve and putting the property on the market. The property sold for $2,560,000 which was $610,000 above the vendors reserve.
Interestingly, properties that were on the market last year and could not sell have been relisted and being snapped up quickly.
Have a wonderful week.
Kim Easterbrook
