Auctions numbers increased significantly last week with 568 auctions reported to the REIV producing a clearance rate of 92%. 396 sold at auction, 123 sold before auction, 2 sold after auction. In addition there were 190 private sales.
Anything over an 80% clearance rate indicates we are in a sellers market and 92% clearance rate is a strong clearance rate based on the auction numbers. This should ease though over the next weeks/months with more properties predicted to come onto the market.
Treasurer Josh Frydenberg last week indicated that restrictions on home lending could be introduced before the end of the year to help slow down rising property prices. In the June quarter, it was found that over 20% of home buyers are borrowing more than six times their income which has prompted the predicted crackdown on high loan to value ratio loans. There are concerns that if and when interest rates rise or if a borrower loses their job, they may fail to meet their loan repayments. There was some positive news however with a rise in owner occupiers and first home buyers taking out mortgages.
The 92% clearance rate produced some strong auction results last week and over the weekend. Many auctions are now being conducted mid week to free up agents for one on one private inspections on the weekend.
10/71 Ormond Road, Elwood sold well above reserve which was a surprise as the property was a ‘company share’ titled property. Banks will usually only lend 50 to 60% on these titles which does limit the potential purchases who can actually buy them. Six bidders participated in the auction of the renovated, two bedroom, one bathroom, art deco apartment with no car parking which was quoted at $800,000 to $860,000 prior to auction. The property sold for $1,011,000 which was significantly higher than the last two bedroom sale in the block which occurred in November 2020 for $730,000. I have not previously seen a ‘company share’ titled property sold with so many bidders, many are usually sold via private treaty due to the lack of buyers able/willing to purchase them.
Have a great week.
Kim Easterbrook
There were 182 auctions reported to the REIV over the weekend resulting in a clearance rate of 96%. 88 properties sold at auction, 86 before auction with 246 auctions being postponed. In addition, there were 154 private sales.
Some welcoming news with the Victorian Premier last week announcing private, one on one property inspections could recommence starting last Saturday. This means one selling agent is permitted to show a property to one household as long as the vendor/tenant are not home and the agent waits outside. A difficult job for selling agents who in some cases have to stand on the door of the property for days on end showing many buyers through but a great start to reopening our industry.
The road map also revealed that outdoor auctions will be permitted for upto 50 fully vaccinated people when 70% of 16+ are fully vaccinated. At this stage it also suggests that marketing and staging of properties are not allowed until this point which will make things difficult for new listings to hit the market. It is my understanding the REIV are trying to obtain some clarification around this. When 80% of 16+ are fully vaccinated, open for inspections and large outdoor auctions will be allowed but only fully vaccinated buyers can attend.
Many land sites have been selling under strong competition with 9 Butler Street, Brighton another example of this. The 585 sqm new home site went to auction over the weekend selling for $3,757,000 which was $507,000 over reserve.
Have a great week.
Kim Easterbrook
There were 192 auctions held over the weekend with 93% selling under the hammer. 121 sold at auction, 57 before auction, 139 postponed and in addition there were 102 private sales reported. I expect this number to start rising over the next few weeks.
One on one private inspections of ‘unoccupied’ properties are now permitted but the first week did not start without a lot of confusion over what could and could not occur. There were reports of vendors moving out of properties due to the confusion in regards to what a ‘vacant’ property was. After clarification, it simply meant the tenant or vendor were not permitted to be at the property during the time of the inspections.
Many sales campaigns were thrown into chaos when the construction industry was shut down for two weeks. The shut down has resulted in delays in many sales campaigns as works such as painting, carpets and other activities that may need to occur to get a property sale ready are not permitted to be carried out. In addition to this, the roadmap suggested that photographers and stylists were not permitted into properties until end of October however this was changed mid week and now is a permittable activity.
To add further confusion, selling agents are not permitted to go into property to conduct appraisals yet property valuations can take place. There are still a lot of inconsistencies in the rulings which hopefully will all be ironed out over the next few weeks. That being said, we are all very grateful that the real estate industry can somewhat operate, even if the opening was somewhat bumpy.
56 Duke Street, Windsor sold on the weekend with nine registered bidders and five participating in the online auction. The property which is in need of renovation sold for $1,025,000 which was $79,000 above the advertised price. The online auction of 5/20 Mary Street, Kew was also well contested with 7 registered bidders. The property sold for $682,000 which was well above the $550,000 to $600,000 price range.
Have a great week.
Kim Easterbrook
Hi ,
There were 151 auctions reported over the weekend resulting in a 95% clearance rate. 80 sold at auction, 64 before auction and 262 were postponed. There were additional 114 private sales.
More buyers seem to becoming more comfortable buying properties sight unseen with a considerable rise in agents offering virtual tours of properties and then surprisingly, the properties being sold within days after with competition from multiple buyers. Most of the auctions that were held and sold over the weekend likely would have been for properties that had not been inspected in person. Vendors and selling agents are walking buyers through via Zoom and Facetime with purchasers having the ability to ask questions directly to the vendor and also having the ability to request to see specific parts of the property. I attended six virtual inspections on Saturday and felt they all worked very well with also having the additional bonus of having direct access to the vendor to ask specific questions. Of course, not as good as viewing them in person but unfortunately this is the best we all can do at present.
Obviously there are some risks with buying a property this way but some buyers are tired of waiting and others have sold their homes and need to find somewhere to live. On the flip side of this, some vendors have purchased properties and need to sell whilst other vendors are keen to keep things moving along and not have to wait until the news about private inspections. Building inspections of properties are permitted which assists in conducting the appropriate due diligence prior to purchasing.
Restrictions eased in regional Victoria last week which allows upto 10 people to view a property at any one time (1 per 4 sqm rule applies). Even though onsite auctions are now allowed, some are still being conducted online due to the demand from Melbourne buyers who are unable to attend the auctions.
Many properties that did go through to auction over the weekend sold well with multiple bidders. The auction of 12 Shenfield Avenue, Bonbeach had 12 registered bidders. As this is a land site the risk of purchasing site unseen is considerably less. However, buyers who lived outside of 5 km of the property would need to rely on google maps and street view to view the surrounding areas. The property sold for $1,950,000 which was $250,000 above the reserve.
22 Euston Street, Malvern was another property that sold extremely well at auction. 505 sqm, with no herage overlay and no value in the house. The new home site sold for a huge $545,000 above the reserve price for $2,415,000.
We are eagerly awaiting the announcement this week in relation to when private inspections of unoccupied properties will be permitted. The premier has indicated this will be when 70% of the eligible population have had their first vaccination. Some clarification is needed as to what an ‘unoccupied’ property actually is. After lockdown 2 last year, one on one inspections were allowed on all properties being vacant or occupied however the vendor/tenant of an occupied property were not allowed to be home, and were only able to leave for one of the four reasons to leave home. We should know more in the coming days.
Have a great week.
Kim Easterbrook
147 auctions were reported to the REIV over the weekend producing a clearance rate of 97%. 72 properties sold at auction, 71 before auction, 329 were postponed and 4 passed in. In addition, there were 152 private sales. This time last year there were only 17 auctions.
Victorian premier Daniel Andrews announced at a press conference last week that private inspections of vacant properties MAY be permitted once 70 per cent of Victorians had received at least one dose of a Covid-19 vaccine. This was estimated to be by the 23rd of September however new data suggests it could be as early as the 18th of September. Whist this is welcoming news for both landlords and owners of vacant properties, this only makes up one portion of the market. Virtual inspections may be the only way in the short term to view occupied properties or some vendors may decide to move out into short term accommodation during their property’s sales campaign.
An interesting report was released this morning in regards to the amount of money Australians have saved in cancelled overseas travel. The figures provided by the Tourism Research Australia found in the financial year to 2019, that Australian’s spent $62.3b on international travel.
The cancellation of this travel has resulted in over $60b being saved and in the pockets of Australians. Some of this money has been used to purchase property with some buyers increasing their deposits or using extra funds to purchase a holiday house or investment property. In addition to this, dining out, going to the movies and other entertainment has been very limited, particularly in Melbourne over the past 18 months which has also assisted to an increase in savings for the ones who have managed to stay employed throughout the pandemic.
Properties continue to sell sight unseen with a four bedroom home in Box Hill North selling at auction on the weekend for $1,557,000. 25 bidders registered for the auction of 50 Mersey St, Box Hill North with 5 bidders participating. The property sold $257,000 over the top of the advertised price range, it is unclear what the reserve price was.
A house in Elwood also sold last week achieving six offers after one virtual open for inspection. Buyers appear to become more accepting that this is the only way to move forward in the current environment with the saving grace being that builders are allowed to enter to conduct building inspections to ensure the property is structurally sound.
Have a great week.
Kim Easterbrook
The REIV reported 223 auctions over the weekend producing a clearance rate of 99%. Of the 223 auctions, 100 sold at auction, 120 sold before auction and 1 after auction. 441 were withdrawn and 634 postponed. In addition, there were 144 private sales.
With no end in sight to lockdown ending, it is looking more likely that the busy spring period for real estate will be pushed out to summer with some selling agents suggesting that auctions could run as late as the 23rd and 24th of December. The length of auction campaigns could be shortened from four weeks to three weeks and perhaps even two weeks if enough interest can be generated. We should see an increase in stock at the cessation of lockdown due to some vendors holding off launching their campaigns but also selling agents are appraising and listing properties via virtual inspection.
Some vendors are pushing on with the sale of their property by offering virtual tours via zoom to prospective buyers. I attended one of these over the weekend and it worked very well. This can only occur at properties where either a tenant or vendor are currently living there as no one is able to attend a vacant property to film. While the vendor walks their camera through the property room by room, the selling agent narrates in the background. Whilst this is obviously not as good as inspecting in person, it is the best that can be offered in the current environment. If a buyer chose to purchase this way, a building inspection (which are allowed) should be conducted to ensure any issues with the property are found.
3 Collis Street, Brighton East sold via virtual auction on Saturday to a buyer who had not physically inspected the property. The property only had a short period of time for physical inspections prior to lockdown so inspections were converted to online with the vendors walking through prospective purchasers in the lead up to auction. The auction attracted five bidders and smashed the reserve of $3,950,000 selling for $4,362,000 to a buyer who had not physically seen the property.
Have a great week.
Kim Easterbrook
Hi,
Auction numbers were down again over the weekend with 281 virtual auctions conducted. Of these auctions 138 sold at auction, 136 sold before auction and 7 passed-in bringing the clearance rate to 98%. Only auctions that selling agents were confident had buyers continued through to auction so the clearance rate is not reflection of the state of the market as 527 auctions have been postponed.
With Covid-19 case numbers rising and regional Victoria now thrown into lockdown, the real estate industry is effectively shut down with only virtual tours of properties allowed. Rental properties seem to be leasing well via virtual tours but very few properties will sell and new listings being launched are extremely low.
The REIV are currently lobbying the government to have 1 on 1 private inspections permitted (which was allowed during Lockdown 1.0 via a permit system) but it seems to be falling on deaf ears. I could only imagine the stress that some vendors must be feeling if they are selling due to financial hardship or if they must sell as they have purchased a property.
The online auction of 9 Kawareen Street, Balwyn North lasted for 90 minutes while two parties would not give up on securing the five bedroom, three bathroom home. For 30 minutes of the auction the bidding increments were at just $500 with both parties at multiple stages during the auction giving up and congratulating the other party. The property sold for $2,421,500 which was over the $2,200,000 reserve.
A home in Parkdale went under the hammer on Saturday after just having two opens prior to lockdown. 9A Evans Street, Parkdale is a four bedroom, two bathroom that has a great floor plan which allows it be easily renovated. 24 buyers registered to participate in the auction with only three bidders taking part. The auction commenced on a vendor’s bid of $1,000,000 with the property being announced on the market at $1,200,000. The property sold for $1,240,000 to first home buyers.
Have a great week everybody!
Kim Easterbrook
Hi,
Auction numbers were down on the weekend with 482 auctions postponed. 387 auctions were still reported to the REIV with 214 of these selling at auction, 154 before auction and there were an additional 149 private sales. Most of the auctions that are scheduled for this weekend coming will likely be pushed out until after lockdown ceases unless the agent is confident that they have a number of strong buyers. And even in that case, most of these negotiations have been brought forward.
For our Melbourne offices, it will be a quiet period of buying until we can inspect properties again, however for our Geelong/Ballarat office, it has been busy and business as usual. Our rentals team have been surprisingly busy leasing a number of properties last week via virtual tours which shows that the lockdown has not deterred tenants from planning their next move.
Online auctions continued to deliver some strong results with an unrenovated house at 25 Hume Street, Armadale selling well above the price guide. Five bidders tried to secure the property that was quoted prior to auction for $3,500,000 to $3,850,000 and selling for $4,200,000.
The Geelong market continues to go from strength to strength with a house in Hamlyn Heights selling for $138,000 over the reserve price. 12 Langibanool Ave, Hamlyn Heights was quoted for $525,000 to $550,000 prior to auction with ten buyers registered to bid but only five of them participated in the auction. The fourth bid was $550,000 where the property was announced on the market but strong bidding pushed the sale price to $688,000.
Have a great week.
Kim Easterbrook
Hi,
What a difference a day can make, one day the State Government was announcing no Covid-19 cases then the next day we are in lockdown. There were over 1,000 auctions scheduled for the weekend however 701 have been reported to the REIV as being postponed. Of the 397 auctions that were to be held online, 267 sold at auction, 92 sold before auction and 38 passed in resulting in a clearance rate of 90%. In addition, there were 149 private sales.
It seems that 2021 is the year of in and out of lockdown. The real estate industry has adapted very well however there is still only a certain amount that can be done under the tight restrictions. Auctions can easily be converted to online however onsite inspections of properties are not allowed. This basically puts the industry into a holding pattern until restrictions ease.
Lockdown aside, there were some very strong auction results over the weekend with some properties selling hundreds of thousands of dollars above the vendor’s reserve. 4 Hamilton St, Seddon was quoted $1,200,000 to $1,300,000 prior to auction and is a three bedroom, two bathroom, single fronted period home on 322 sqm. The property whilst updated, did not have a great floor plan and could have done with some additional works to lift it to its full potential. The property sold for $1,567,500 which was $276,500 above the vendor’s reserve.
8 Grange Road, Sandringham was also another popular property. The property was quoted $1,690,000 to $1,790,000 prior to auction and is an entry level, family home for the area with four bedrooms, two bathrooms in very liveable condition on 356 sqm of land. The property had reached the vendor’s reserve after a strong opening bid of $1,900,000 which knocked out some participants immediately. There were an additional two bidders above this level with the property selling for $2,155,000.
Have a great week.
Kim Easterbrook
Hi,
Lockdown 5.0 thankfully ended last week which allowed onsite auctions to take place over the weekend. 433 auctions were reported to the REIV weekend resulting in a clearance rate of 88%. 278 properties sold at auction, 50 passed in, 105 sold before auction but 595 were postponed (to take place over the next few weeks). In addition, there were 186 private sales. Interestingly, this time last year there were 217 auctions and a clearance rate of 78%.
Lockdown 5.0 does not appear to have impacted the property market with buyers very willing to participate at auctions over the weekend. If anything, it may have had a negative effect on the amount of properties coming onto the market. Some vendors are concerned about the disruptions of lockdowns and are holding off selling whilst in actual fact, the lack of stock couldn’t make it a better time to put their properties on the market.
As a company, we have seen a small impact of the Covid situation in Sydney. The first six months of the year we had received considerable buyer enquiry from both owner occupiers moving to Victoria due to the housing affordability factor and Sydneysiders wanting to invest in the Victorian property market. Over the past few weeks this enquiry has dropped to virtually zero. Whilst we believe this will only be short term, there is no doubt and understandably, residents from Sydney may have put their plans into a holding pattern.
75-77 Haydens Road, Beaumaris went to auction over the weekend which was quoted $2,500,000 – $2,650,000 prior to auction. The three bedroom, two bathroom home in need of renovation is set on a large block of 1,226 sqm sold for a huge $580,000 over reserve for $3,230,000.
A fire damaged home 44 Collins Street, Thornbury sold for a big price considering that it would be unlikely that a bank would lend money against the property in its current state as it could be deemed as uninhabitable. The tenants who resided in the property unfortunately fell asleep whilst a candle was burning and the front section caught fire. Five bidders participated in the auction with the property selling under the hammer for $1,517,500 which is significantly higher than the $1,150,000 to $1,250,000 quoted price range.
Have a great week.
Kim Easterbrook
