Large crowds and a high number of bidders at auctions on the weekend as the market powered back after the Anzac Day break. The clearance rate of 80 per cent gives a good indication as to the strength of the Melbourne market. There were 929 auctions this weekend, with 746 properties selling and 183 being passed in, 85 of those on a vendor bid. There were an additional 507 private sales reported.
If you’ve been paying attention to our weekly market updates, you might have noticed the strong results we’ve been reporting this year in private sales in addition to the strong auction market. There has been a growing number of off-market sales in Melbourne, as many buyers are trying to avoid the heat at auction. The prestige segment of the market is well known to achieve off-market sales, but this year pre-auction sales have become more common in lower price brackets.
The March quarter results have shown that the median house price in Melbourne’s inner suburbs has risen to $1.1 million. Following this trend, we’ve seen that the top three performing suburbs this week were South Yarra, Richmond and Brunswick – all on the fringe of the city.
Reports of new State Government property taxes to be introduced for foreign buyers has given the real estate industry a shake up. Not only will non-residents have to pay an additional 3 per cent of the purchase price in stamp duty from July 1, there are also plans for an absentee land tax of 0.5 per cent from 2016, for any foreign buyers who do not occupy their property. It will be interesting to see how the next few months play out with the governments’ moratorium on foreign investors who have illegally purchased existing homes in Victoria (instead of buying new builds). It may cause a surge of properties being added to the market before November 30, as those foreign owners take the opportunity to sell their properties before the strict punishments are implemented.
Next weekend there will be over 880 auctions expected to take place.
Auction Results
5 Carool Road, Carnegie. Sold for $1,520,000
Targeted at developers and quoted prior to auction at $900,000 – $990,000 this three-bedroom knockdown home on a 766m2 corner allotment with permits for 2 townhouses, was a rare find indeed. In 2013, this property sold for $850,000. The opening bid of $1 million already reached the vendors’ reserve and three bidders took the price over $1.2 million where it was announced on the market. A fourth bidder joined at $1,305,000, but bowed out only $10,000 before the final bid which was astonishingly $520,000 above the reserve. The new owners are two friends who intend to build neighbouring townhouses.
6/11 Rockley Road, South Yarra. Sold for $880,000
Located in one of South Yarra’s beautiful tree lined streets, this top floor, rear facing, 2/3 bedroom is in a comfortable but dated condition. With a spacious layout and close proximity to vibrant Toorak Rd, Chapel St and leading schools, it was no surprise that over 90 people attended this highly charged auction. 9 bidders battled it out from opening bid of $600,000 to the final result of $880,000 – much to the amazement of neighbours who witnessed the sale of a fully renovated apartment in the same block in 2013 for $704,000.
17 Carew Street, Sandringham. Sold for $1,940,000
This beautifully renovated four-bedroom period home in a highly sought after location close to shops and the beach unsurprisingly attracted a large crowd to the auction, with four bidders amongst them. The auction opened with a vendors bid of $1.6m and was slow to gain momentum, but once the auctioneer enticed some participation, two bidders quickly took the property price to $1.825m, where the first bidder dropped out. Two late comers were the last two left when the property was announced on the market at $1.87m and then sold for $1.94m.
A large number of auctions were held in Melbourne on the weekend, partly due to vendors hoping to sell before Anzac Day. The result shows how strong the market is right now – a clearance rate of 79 per cent. There were 1077 auctions this weekend, with 851 properties selling and 226 being passed in, 118 of those on a vendor bid. There were an additional 466 private sales reported.
Properties in the $1 to $2 million price range attracted some serious attention on Saturday, with many far exceeding their reserves – some by $450,000. The ripple-effect is becoming quite pronounced as buyers are looking at the next best suburb if they are being priced out of their first choice suburb.
What areas of Melbourne saw the most auction activity this weekend? The western suburbs again held higher auction numbers of about 200, compared to the normally strong eastern suburbs which held 118 auctions. As a sign of buyer depth, many outer areas are now increasing the number of auctions held. Traditionally these areas have more private treaties because there is normally more properties available than buyer demand, however this trend is changing. Agents are reporting that one possible reason for this is due to people moving to the outer areas of Melbourne after being priced out of the Sydney market.
Next Saturday is the 100th anniversary of Anzac Day, and only 81 auctions are scheduled, so our next market wrap will be in two weeks time.
Auction Results
13 Hardy Street, Brunswick. Sold for $1,300,000
This property was quoted between $1 million and $1.1 million before auction. A renovated and extended four bedroom Victorian home, located close to schools and Sydney Road shops was popular with a few bidders on Saturday. The auctioneer began with a vendor bid of $1 million to start, then asked for $50,000 rises. Two parties rose to the occasion, helping the property be announced on the market after the fifth bid. At this point a man with his daughter entered the competition and bid strongly to pay $100,000 above the reserve, and become the new home-owners at $1.3 million.
11 Albert Place, Richmond. Sold for $1,335,000
A crowd of about 30 people had gathered to watch this three bedroom, two bathroom townhouse go under the hammer. The auction began when a woman on the phone raised her hand to agree to the auctioneer’s suggestion of offering “a million dollars”, then another three bidders became involved. The last bidder to join in had the best staying power as their final bid of $1,335,000 successfully demolished the competition.
7/151 Glen Huntly Road, Elwood. Sold for $341,500
This entry level, updated one bedroom apartment with car parking attracted three bidders, all being first home buyers who all attended the auction with their parents. Bidding opened up at $300,000 by a very nervous first home buyer but the other two parties had their parents bidding for them. The property was announced on the market at $340,000 and two further bids saw the property sell for $341,500 to a very excited first home buyer.
The Melbourne auction market returns after the Easter break with similar energy as before Easter, showing the school holidays have not kept buyers away. There were 555 auctions this weekend, with 431 properties selling and 124 being passed in, 62 of those on a vendor bid – resulting in a clearance rate of 78 per cent. In addition to the auctions there were also 455 private sales reported.
These results continue to add weight to the claims of Melbourne having a two-speed auction market, as budget suburbs continue to lose out to the higher priced locations such as those in the inner East. But these uneven results mean that conditions could not be described as a total seller’s market as there are still many properties which are selling for prices close to their reserve.
The top auction suburbs this weekend were Reservoir (11 auctions), Mt Waverly (10 auctions), followed by Carnegie and South Yarra each with 7 auctions. But overall it was the western suburbs who dominated auction numbers this weekend with a collective 102 listings. The eastern suburbs will likely dominate auction numbers again next weekend as it seems that vendors have avoided the school holiday period for listings.
Next weekend an expected 1060 auctions are scheduled.
Auction Results
2 Palmer Street, South Melbourne. Sold for $3,210,000
Eighty people attended the auction of this impressive four-bedroom house with a pool and rooftop terrace, including parties from New Zealand, the USA and China. Four bidders, two on phones contested until it was announced on the market at $3 million, which knocked out the third bidder. It wasn’t until the property was almost sold at $3.17 million that the fourth bidder appeared, and added three more bids and successfully bought the property.
23/156 Rose Street, Fitzroy. Sold for $1,400,000
This designer warehouse apartment in a former chocolate factory has city views, direct lift access within the mulit-level contemporary industrial feel property. A vendor bid of $1 million kicked off the auction with four hopeful buyers pushing the price past the reserve of $1,225,000. But it was a young couple who joined the bidding mid-way through the auction who trumped the competition with their confident bids and walked away as the new owners of the three bedroom apartment.
23 Cornell Street, Camberwell. Sold for $3,000,000
It was a full house on Saturday with over 110 people attending the auction of this newly built luxury French provincial home. After some coaxing by the auctioneer, the opening bid came in at $2,000,000, two other parties then stepped in bidding in $50,000 rises. The property was declared on the market at $2.75M and a fourth bidder stepped out of the woodwork right when it began to slow down. It picked up again until it reached $3,000,000 where it was won.
Great confidence in the market is highlighted by the bidding on the weekend, and the resulting clearance rate of 79 per cent. There were 1336 auctions this weekend, with 1050 properties selling and 286 being passed in, 127 of those on a vendor bid. In addition to the auctions there were also 506 private sales reported.
The high clearance rate from the large number of auctions across Melbourne on the weekend is more evidence of strong demand from buyers, making this first quarter of 2015 remarkable. Melbourne is very close to becoming a boom market, with multiple bidders willing to pay well above the reserve to secure certain properties.
The high-end of the market has seen some activity this week, with a landmark Kew estate, on the banks of the Yarra, selling at a private auction for over $5.75 million.
Due to the Easter long weekend there will only be a handful of auctions next week, so our next Market Wrap will be in two weeks! From all the team at Elite Property Advisory, we hope you all have a happy and safe Easter break.
Auction Results
13/108 Moor Street, Fitzroy. Sold for $1,310,000
This recently refurbished top-floor warehouse apartment had views overlooking Fitzroy Townhall, as well as multiple living zones, two bedrooms with two bathrooms. It had a tough time generating bids despite the good crowd of 60 onlookers at the auction. A vendor bid of $1.1 million began the auction, and was upped by a couple offering $1.12 million. A second vendor bid of $1.15 million encouraged the couple to increase their offering to $1.16 million. The property was passed in but was sold during negotiations with the couple, who agreed to pay $1.31 million.
378 Punt Road, South Yarra. Sold for $680,000
With a price range of $450,000 – $490,000 in the much-coveted suburb of South Yarra, this property was indeed full of potential for developers or renovators. The three level, three bedroom property, in a state of disrepair had 20 building inspections prior to the auction, with ‘danger’ signs and grafitti throughout the property. The auctioneer accepted an opening bid of $380,000, which was followed by many $10,000 and $5,000 rises until it was eventually on the market at $520,000, before being announced as sold at $680,000.
1/7 Hillston Road, Moorabbin. Sold for $755,000
Thoughtfully renovated to a high standard, this brick, street-front Moorabbin family home has been subdivided from a new townhouse behind. This well received formula in Melbourne’s inner suburbs is now being applied progressively further out, resulting in affordable, good quality housing on smaller allotments. Opening at $650,000 and with over 50 groups attending, 4 bidders quickly placed the property on the market at $750,000 and saw it sold at $755,000.
Strong sales results were reported this weekend with a clearance rate of 77 per cent, and buyers are continuing to face tough competition. There were 1096 auctions this weekend, with 846 properties selling and 250 being passed in, 113 of those on a vendor bid. In addition to the auctions there were also 438 private sales reported.
Properties in Melbourne’s eastern suburbs are experiencing strong demand this year, showing that the market has turned in favour of vendors. With less stock on the market than this time last year, as well as the cheap finance available to buyers, there is tough competition in some pockets of Melbourne – particularly the east, the inner-south, the inner-north and some bayside areas.
Is this a boom period? Well, some areas experiencing above 80 per cent clearance rates are booming. While other areas, such as the western suburbs holding high levels of listings, and a lower proportion of sales, are not doing as well.
If this is a boom period in Melbourne’s property market, will we start seeing reserve prices go up? Possibly, but we suggest that vendors proceed with caution as this tactic doesn’t always work, and astute buyers will always know the right point to walk away from a price.
Auction Results
22 Budd Street, Brighton. Sold for $1,820,000.
Recently revived by an interior designer to open it up and extend it further out, giving a contemporary touch to this c. 1880 Brighton double-fronted property. This well located home attracted 120+ people to the auction, with 5 bidders amongst them. The opening bid of $1.5 million was challenged by a flurry of bids, as the price sailed on past the reserve of $1.75 million, until finally being announced as sold at $1.82 million.
10 Howard Street, Brunswick. Sold for $881,000.
With architect-designed extensions, this superb Victorian cottage close to the cafes of Sydney Rd and Lygon St provided a great setting for a heated auction. One man wishing to buy the property for his wife’s birthday opened with a bid of $740,000 before another man offered a huge rise of $800,000. The first man wasn’t giving up so easily, and continued to increase with $1,000 increments to each offer his competitor made. At $870,000 this tactic worked, and the second man bowed out, just as another two would-be buyers jumped in, one of whom became the new owner at $881,000.
13a Norfolk Road, Surrey Hills. Sold for $1,920,000.
Built in the 1940s with significant English style on a large block of land – approximately 929sqm, this appealing family home was very attractive to a range of different buyers. The five bedroom home could either be left as is, extended further, or rebuilt completely. The opening bid of $1.4 million was further challenged by two other bidders who helped the property get announced on the market at $1.7 million. A fourth bidder became involved with five $1,000 rises, but it was the original bidder who successfully bought the property at $1.92 million.
Vendors have been pouring properties onto the market to take advantage of the selling time before Easter, and the result was a 78 per cent clearance rate. There were 959 auctions this weekend, with 752 properties selling and 207 being passed in, 100 of those on a vendor bid. In addition to the auctions there were also 352 private sales reported.
Last weekend’s clearance rate of 70 per cent was surprisingly strong for a long weekend. While this weekend’s result came from a wide mix of listings available for auction, with some lower priced properties in the western suburbs and inner-south making an impact in the weekly figures. Despite this, the higher level market is still holding well.
It may have been the lovely sunny weather, but some auctions received crowds of 200 attending on Saturday, which is a good sign for vendors hoping to sell before Easter.
There is little doubt that some suburbs of Melbourne will expect modest price growth this year, as the demand for properties located within areas with good public and private schools is being driven by upgraders taking advantage of the lower interest rates.
Even the sandbelt suburb of Black Rock experienced a record sale price on Saturday, reaching a staggering $1,010,000 above the reserve and setting a new residential record price of $3,810,000 for the suburb.
Auction Results
1a Kinross Street, Hampton East. Sold for $781,000.
Secured behind high garden fences, this two bedroom home is surprisingly spacious with two living areas and an entry level price quote of $580,000 – $640,000. The auction on Saturday was attended by thirty people, with three parties pushing the price up to $700,000 when it was announced as “selling”. The bidding did not stop there, as the auctioneer accepted bids from three different directions until the hammer was finally brought down at a price of $781,000.
2 Deal Close, Moorabbin. Sold for $820,000.
One of Moorabbin’s unique solid brick post-war homes went under the hammer on Saturday. Made from local concrete Besser blocks, the 3 bedroom family home with a quality renovation, family sized garden, garage parking and quiet cul de sac location seemed the perfect formula for this popular auction which attracted over 60 onlookers. Opening at $710,000 and on the market at $810,000 the fierce bidding from 3 prospective buyers saw the property sold for $820,000 to the applause of the crowd.
11 Tucker Place, Fitzroy North. Sold for $3,571,000.
This unique warehouse conversion, designed by Daniel Van Cleemput, with six bedrooms and an emphasis on space and light, attracted a large crowd to the auction. One man made a $3 million opening offer, which was topped by a woman adding another $20,000. The bidding continued between the two until $3.34 million when a third prospective buyer jumped in, and the property was announced on the market just shy of $3.4 million. However, it was the first bidder who was able to outshine everyone and take the keys for $3,571,000.
A clearance rate of 79 per cent was recorded this weekend, which is up 4 per cent from last weekend. This week has seen the highest amount of auction activity so far this year, with 1275 properties going under the hammer for the first “Super-Saturday”. From those auctions 1002 properties sold and 273 were passed in, 141 of those on a vendor bid. In addition to the auctions there were also 563 private sales reported.
With such a high volume of homes being put up for auction, the surprisingly high clearance rate has certainly shown the strength of the market right now. We have seen depth in the number of bidders, particularly in Grade A properties, and some fierce tactics being utilised to try and scare off the competition.
High end properties have also seen a boost in stock levels, with the highest number of $2 million to $6 million homes available since November 2014. We are now in a period when the share market has lifted, and this has increased the level of buyers seeking $2 million-plus properties to the proportions normally experienced amongst the hotly contested $1 million to $2 million bracket.
It could be more good news for home owners, if the Reserve Bank decides to cut interest rates again in the coming weeks, investors will be able to take advantage of the lower borrowing costs and higher share prices, and add to their property portfolios.
Only 260 auctions are expected next weekend in Melbourne, due to the Labour Day holiday weekend.
Auction Results
5/9-15 Palmer Street, East Melbourne. Sold for $760,000
One of only twelve in THE HERMITAGE, a building with significant period character, exceptional size and north facing views, this unrenovated one bedroom apartment attracted a big crowd of 70 at the auction on Saturday. East Melbourne is in very high demand due to its consistent architecture and close proximity to the city. The bidding opened up at a conservative $500,000 when another bidder jumped $50,000 to $550,000 immediately. Six bidders fought it out to buy this unique piece of real estate. The property sold under the hammer for $760,000, well above the reserve.
6/18 Downshire Road, Elsternwick. Sold for $730,000
A sensational location in one of Elsternwick’s premier streets, this renovated villa unit was in high demand from first home buyers, downsizers and investors. Set quietly at the rear of a boutique group of only 6, the auction was attended by a crowd in excess of 70 people. A strong opening bid of $666,000 was delivered to intimidate other buyers, and from there only two other bidders participated, with many other bidders not having the opportunity to bid. The property was announced on the market at $700,000 and sold for $730,000.
10 Bowler Street, Hawthorn East. Sold for $1,100,000
Last sold in 2009 for $690,000 this renovated single-fronted semi-detached Victorian home now fetched an asking price of $900,000. The demand for two bedroom cottages in inner-ring locations was reinforced when 90 onlookers attended the auction, and 5 bidders took part. Bidding began at $800,000 and at one point an offer of $1 million was made by two parties simultaneously, then one of those parties immediately upped the ante by $10,000. The property was declared “selling” at $1.02 million after passing the reserve of $950,000, and sold for $1.1 million.
For the first major auction weekend of the year, there was a substantial lift in auction numbers with 852 properties going under the hammer, resulting in a clearance rate of 76 per cent. From those auctions 651 properties sold and 201 were passed in, 95 of those on a vendor bid. In addition to the auctions there were also 408 private sales reported.
The Reserve Bank’s interest rate cut last week has increased confidence in the property market, and their was some heated competition from buyers keen to purchase property in superior streets.
There has also been a noticeable trend towards purchasers seeking out well-located properties on sizeable blocks, with the intention of knocking down and rebuilding. In the past year, the Australian Bureau of Statistics has reported a spike in approvals for new homes being constructed in established suburbs.
While the market is still just warming up and providing results similar to the end of last year, auction numbers increase to over 1,200 next Saturday. The increased stock levels in the coming weeks will be a good test to the strength of the market for 2015.
Auction Results
1/10 Rushall Street, Fairfield. Sold for $1,265,000
This impressive three bedroom townhouse with street frontage is one of only four in a quiet, leafy street. An audience of nearly 40 attended the Saturday auction of the 5 year old home. The opening bid of $950,000 was contended with by two other bidders to $1,150,000 when it was declared on the market. A fourth bidder took up the challenge to $1,260,000 then the initial bidder pulled away in bids of $1000 to purchase the property for $1,265,000 to loud and welcoming applause from his new community.
12 Gowar Avenue, Camberwell. Sold for $2,765,000
Oozing family appeal, this four bedroom with a pool, located in one of Camberwell’s most desired pockets attracted a considerable crowd of 100 onlookers to the auction. The auctioneer described the cleverly designed alfresco appeal before accepting a $2 million offer. It wasn’t until the bids reached $2.51 million that the property was on the market, prompting four contenders to tackle and outbid the first bidder. It eventually sold for $2,765,000, which was an impressive price jump from the $1.8 million it sold for in 2008.
23 Woodbine Grove, Chelsea. Sold for $917,500
A big crowd gathered to watch the auction of this large development site in one of Chelsea’s best streets. Quoted at $700,000 plus, the auction opened at $820,000 which was strong and determined by one buyer. Three other bidders joined in to try and buy this classic two bedroom home with plenty of land to extend or redevelop. The property was announced on the market at $915,000 and sold for $917,500.
Melbourne’s auction market has received a warm welcome back for 2015. There were 458 auctions reported this weekend, with a clearance rate of 74 per cent. From those auctions 338 properties sold and 120 were passed in, 61 of those on a vendor bid. In addition to the auctions there were also 358 private sales reported.
Auction numbers are on the increase again, as is the clearance rate which saw a nine per cent jump since last weekend. But were those lower clearance rates recently recorded due to lower housing stock, or could it be a trend?
The ABS released figures last week describing residential price growth slowing, with Melbourne’s established house prices only growing by 1.1 per cent duing the December quarter.
The recent interest rate cut, and predictions of another rate cut being on the cards for the coming months may mean that property prices will be on the rise again. The lower interest rate environment mixed with the current volatility of the Australian share market means that returns on investments are at an all-time low. Investors are beginning to see property as a safe alternative, particularly for their SMSF.
The current stock levels available in Melbourne are tracking lower than the same time last year by 25 per cent. We believe this to mean there will be some heated competition for good quality properties. Some of our team attended very hotly contested auctions this weekend, and we are expecting more of this in the early parts of the year.
Auction Results
1/8 Duff St, Sandringham. Sold for $715,000
This villa unit, in urgent need of renovation was highly contested. Originally quoted at $500,000 to $540,000, it was announced on the market at $570,000, which we felt was very realistic for a property like this. Part of a small unit development, the property boasted street frontage and its own driveway which would appeal to many buyers.
Six bidders fought to secure this property and to our surprise it sold well in excess of any comparable sales in the area. Three bidders were still in the race at $700,000 but all down to their final $1,000’s when the property sold for $715,000 to the disappointment of many buyers in the crowd.
6 Kyarra Ave, Hampton. Sold for $1,640,000
Terrifically positioned close to Hampton Street and Sandringham shops, this lovely Californian Bungalow in walking distance to the beach was highly sought after, with a quoted price of $1.3M to $1.45M. The auctioneer, Sam Paynter did a great job of entertaining the crowd whilst attracting bidding from 6 parties.
The opening bid was $1.25M from a very determined buyer who was bidding strongly for the entire 30 minute auction. Bids were coming in from all over the street until a gentleman jumped in when all thought it was over to snatch the property away from the original bidder, who no doubt thought the home would be his. The property sold for $1.64M, well in excess of the reserve price.
18 Street St, Footscray. Sold for $712,000
A charming family Edwardian, stylishly renovated attracted a crowd of 100+ hipsters for the auction of this three bedroom house. A guide price of $540,000 plus brought out the buyers, and the auctioneer received an opening bid of $520,000 which was quickly crushed by a bid of $610,000. A third couple pushed the price to $635,000 to which the auctioneer announced the property on the market. Rapid-fire bidding began when a fourth party began outbidding another couple for approximately five minutes, and 16 bids. The final winning bid was delivered by the last party who secured it for $712,000.
The penultimate auction weekend for 2014 saw high volumes of properties going under the hammer. There were 1,266 auctions reported, with a clearance rate of 70 per cent. 881 properties sold at auction with 385 being passed in, 192 of those on a vendor bid. In addition to the auctions, there were also 486 private sales were reported.
The year is winding up with a bang as more than 1300 properties were on offer on Saturday. Some properties were even discounted in B-grade locations, presenting excellent buying prospects. Discounting of properties sometimes occurs at this time of year as vendors feel the pressure to sell before Christmas. Conditions like these where vendors require a quick sale is great news for buyers keen to snag a deal.
While clearance rates have been trending down since early November, there has still been a lot of movement in the property market. Many have taken advantage of the low interest rates to either get further ahead with their mortgage repayments, or upgrade.
What are your predictions for the 2015 property market in Melbourne? We’re expecting a strong start to the year, particularly in the inner suburbs. The talk of interest rates being lowered could have an effect of encouraging more buyers to pursue property, which will make it an interesting year! Next weekend is the final auction weekend for 2014, with 462 auctions scheduled.
