Large crowds and a high average clearance rate are proving that 2014 is shaping up to be a big year for the Melbourne property market. A clearance rate of 75 per cent was recorded on 892 auctions on the weekend. There were 666 sales, and 226 being passed in, 104 of those on a vendor’s bid. In addition to the weekend auctions there were 438 private sales. With an average clearance rate of 72% so far for 2014, the market is performing better than the same time last year when the average was 67%.
Is this a sign of growth in the Melbourne property market? Well, we’ve been noticing that families are on the move into larger homes across all areas of Melbourne, which has resulted in more fierce competition at auctions. It’s not just the lower cost outer-suburbs which are being snapped up by families, but homes in the inner suburbs are also producing excellent sales results. Investors and downsizers are still contributing to the demand but when trade-up family buyers begin to compete for properties, it is a sign that the real estate market is settling into a period of growth.
Vendors may be trying to make the most out of improved buyer demand, but buyers are doing their research and are walking away from prices that don’t reflect fair value. Some auctions we’ve attended have had four or more bidders, but the resulting sale prices have not been too surprising based on the fair market values. It certainly is an interesting year for Melbourne property, and we’re loving being involved in it!
An expected 1,350 auctions will be held next weekend, making it the biggest auction weekend of the year to date.
Melbourne’s auction market is back in full swing again after the Labour Day long weekend last week. The clearance rate of 73 per cent on 837 auctions is higher than the same weekend last year, which achieved a clearance rate of 68 per cent on 832 auctions. This is a significant increase in the amount of auctions as well as the overall sale results compared to last year. In addition to these auction results, there were 389 homes sold privately on the weekend.
Approximately 3,500 homes have gone under the hammer so far this year, with activity levels higher than over the final months of 2013. Interestingly, the REIV are reporting a decrease in the number of private sales compared to the same time last year. This indicates that while the premium end of the market is doing well, the private sale market is showing signs of a slowdown.
Which areas of Melbourne would you think are showing the fastest growth in property values? It turns out that the gentrified areas of the inner northern suburbs such as Clifton Hill, Fitzroy, Flemington and Carlton North have property values growing at a faster rate than any other areas of Melbourne. RP Data reported last Friday that Fitzroy’s house prices grew by 37.7 per cent last year. While areas such as Hawthorn, Middle Park, Windsor, Malvern and Port Melbourne all had their median house prices rise up by 22 per cent to 33 per cent. We come to expect high-priced sales in some of these suburbs, however the inner north is definitely an area to watch in the Melbourne property market.
See below for a rundown on three auctions we found interesting on Saturday. Next weekend, an expected 1,110 auctions will be held in the Melbourne area.
Market Comment
Melbourne
3rd March 2014
The autumn selling season commenced over the weekend producing a clearance rate of 74 per cent on 1,094 auctions, with 812 selling and 282 being passed in, 154 of those on a vendor bid. In addition to the weekend auctions there were 402 private sales.
Approximately 2,400 homes have sold at auction so far this year, compared to 1,800 for the same time last year. With multiple bidders at auctions, and high clearance rates above 70% for February shows that buyers believe this is a good time to purchase property, despite some negativity in the overall economy. The Reserve Bank will meet this week for the second time this year, to determine interest rate settings for the coming month. While interest rates have been on hold since last August, when they reached an historical low of 2.5%, mortgage interest rates have been falling as banks compete for market share in a positive environment for home buyer activity. This sentiment was reflected in Melbourne as all auctions attended by Elite over the weekend were well attended, with multiple bidders, and some aggressive bidding taking place. See below for more details on the auctions we attended.
A clearance rate of 75% was recorded this weekend from 1,105 auctions, and the first Super Saturday of the year. In addition to the weekend auctions there were 347 private sales. Already for 2014, there have been over 1,000 homes sold by auction, which is a solid start to the year.
Last week, ANZ gave a positive outlook for the property market, stating that the entry hurdle for buyers has been significantly lowered by falling mortgage rates. The incentive to buy sooner rather than later has also been re-established by renewed growth in home prices. Their research found that the recent speculation of a housing bubble is untrue, and that the market is merely playing ‘catch-up’ as a result of improved affordability and the release of substantial pent-up sales demand in recent years. This is good news for buyers in 2014.
Next weekend will be the second Super Saturday of the year, with an expected 1,290 auctions.
A very strong auction market so far for 2014, as evidenced from the weekend’s clearance rate of 71 per cent on 620 auctions. Last weekend, the clearance rate was 67 per cent. There were 400 private sales and 1320 auctions are expected for next weekend.
All auctions attended by the Elite team over the weekend sold under the hammer to the tune of 10% – 30% above the reserve price. Each auction also attracted large numbers of people, giving a good indication of the interest and demand for Melbourne properties.
The Sunday Age featured my comments yesterday on how strong the market is looking currently. I believe that the market may even be a little bit stronger than what we saw in late 2013. Both the competition between mortgage providers as well as the high clearance rates seen so far in 2014 brings confidence for buyers and vendors, as we see more properties coming on to the Melbourne market.
We are looking forward to seeing what clearance rates are achieved next weekend from the expected 1320 auctions. February is proving to be quite a hot month for Melbourne properties in 2014!
The auction season commenced over the weekend producing a clearance rate of 71 per cent on 620 auctions. In addition to the weekend auctions there were 400 private sales. Next weekend will be the first test for the year with 1320 auctions expected for the weekend (the first Super Saturday for 2014).
All auctions attended by the Elite team over the weekend sold under the hammer to the tune of 10% – 20% above the reserve price. Check out some of the results below.
If you missed it, Elite Property Advisory provided comments in The Sunday Age yesterday around the feel of the current market. We are looking forward to seeing what clearance rates are achieved next weekend from the expected 1320 auctions.
Kim Easterbrook talks about the increasingly competitive Melbourne auction scene.
Kim Easterbrook talks about what makes or breaks a suburb.
Read the full article here.
Kim Easterbrook comments on an increase in single female buyers.
Read the full article here.
Kim Easterbrook comments on holiday properties.
