Hi,

There were 573 auctions reported to the REIV resulting in a clearance rate of 79%.  322 properties sold at auction, 128 before auction, 1 after auction and there were an additional 255 private sales.  In comparison, the same weekend last year there were 817 auctions reported to the REIV resulting in a clearance rate of 76% and last week’s final result was 813 auctions reported resulting in a clearance rate of 78%.  The Melbourne property market does still feel quite price sensitive, where buyers are generally cautious about what they are wanting to pay due to high cost of living, higher interest rates and generally a level of caution still in the market.

CoreLogic released it’s data last week showing that Melbourne’s median ‘dwelling’ value has fallen into sixth place with only Hobart and Darwin behind it.  Melbourne’s median ‘house’ price though is still the third most expensive with only Sydney and Brisbane ahead.  There has been a lot of media reporting last week that Melbourne’s ‘house’ price values have slipped to sixth against most capital cities in the country but the reporting is inaccurate as it is the ‘dwelling’ value that has fallen to sixth position across the country.

CoreLogic’s ‘dwelling’ value also includes units and apartments which gives an average of all property prices against all types of property.  According to Tim Lawless (CoreLogic’s research director), a third of all housing stock in Melbourne is medium to high density, where has Perth and Adelaide has a multi unit stock of around 16%.  Units and apartments have a lower price point, and have been slugglish in capital growth for a number of years now and therefore pulls the average ‘dwelling’ averages down.  This therefore skews the data as they are not really comparing ‘apples with apples’.

With Melbourne’s ‘dwelling’ median now sitting in sixth position against other capital cities across the country, it definitely shows that if a first home buyer is looking to enter the market, Melbourne does become an appealing option with a healthy supply of one and two apartments and townhouses.  But this could be shortlived as the number of apartments proposed for construction are now sitting at its lowest since 2007 which will in time, affect the overall supply on offer for perspective purchasers and tenants.

In some positive news for Victoria’s property market, investor loans have increased 9 percent (albeit, lower than the national average) and there are an increasing number of investors circling Melbourne viewing it as a good opportunity to purchase in.

Have a great week!

Kim Easterbrook – Managing Director

Hi,

628 auctions were reported to the REIV on the weekend resulting in a clearance rate of 77%.  357 sold at auction, 124 sold before auction and there were an additional 432 private sales (a very large number).  In comparison, the same time last year there were 843 auctions reported resulting in a clearance rate of 74%.

ABS released its CPI data for the month of July with promising news showing it has slowed and is at a rate 3.5% which is less than the 3.8% result in June.  Still short of the 2% to 3% RBA target but it is certainly heading in the right direction.

Whilst too early for any RBA interest rate cuts, CBA, ANZ and NAB have lowered their interest rates paid on term deposit due to their predictions of rate cuts next year.  CBA has also cut its variable interest rates for most new home loan customers.  NAB, Macquarie, Westpac and CBA have cut its fixed rate loans with the subsidiary lenders following suit.

PropTrack Home Price Index released their national median home price for August showing Melbourne’s median house price declined by 0.18% (effectively remaining stable).  But this is lagging behind Sydney, Brisbane, Adelaide with Perth experiencing the strongest growth at 0.79% for the month.  The index did show that it appears that property price growth across the country has slowed and there is a feeling this will be the case moving forward until we see interest rates come down.

The auction of 62 Stockdale Street, Bentleigh East attracted a large attendance of 60 people.  The renovated home was quoted at $1,500,000 to $1,560,000 prior to auction.  There were three active bidders with the property declared on the market at $1,652,000 and selling at $1,657,000 with the remaining two bidders down to $500 bids.

A single level Guilford Bell architecturally designed home in Toorak sold for $1,200,000 above reserve.  The auction of 184 Kooyong Road, Toorak only attracted two bidders, but two bidders that really wanted the property.  The property was announced on the market at $5,200,000 and sold for $6,400,000.

Have a great week!

Kim Easterbrook – Managing Director

Hi,

There were 577 auctions reported to the REIV resulting in a clearance rate of 77%.  315 sold at auction, 130 sold before auction, 1 sold after auction and 131 passed in.  In addition, there were 133 private sales.  In comparison, there were 876 auctions reported to the REIV last year resulting in a clearance rate of 74%.

Other cities across the country have been experiencing strong home value growth whilst Melbourne property price growth has slowed considerably.  Melbourne and Sydney historically always had the highest median house price however Brisbane has now surpassed both Melbourne’s median house price and unit value.

But why is Melbourne lagging behind when it once was one of the strongest property markets?  It really is due to a COVID handover.  The ongoing impact of lockdowns has been a real challenge for Victoria’s (in particular Melbourne’s) economy.  Hospitality and retail were most affected and then the Government has introduced higher taxes on both businesses and property owners.

In addition to this, compulsory minimum standards were implemented for rental properties (more $ outlayed by rental providers).  Increased land tax, then higher interest rates and costs of living with rent rises not keeping up with the higher running costs of these investment properties.

Whilst immigration is still strong (mostly from overseas), there have been some people packing up and moving intestate and others just selling their investment properties and exiting the state’s property market.

Whilst confidence in the Melbourne property market is still low, we know Melbourne is a great city to live and in time, demand for property should increase.  A few interest rate cuts will likely be all it takes for the confidence to come back into the Melbourne property market.  Historical behaviour has shown that once confidence builds in the market, other buyers will follow… and usually at a fast rate, and Melbourne could yet again become one of the (if not the) highest performing property market in the not to distant future.

But meanwhile, we had another patchy auction weekend with a mixed bag of results, some auctions had active bidding, whilst others had one bidder or none at all.

That being said, there is always an auction that has strong bidding and worth speaking about.  The auction of 25 Thomson Street, Seddon had good interest mostly from first home buyers.  The property was small but typical for the area but was well located and had a pretty double fronted facade.  The property was quoted at $1,100,000 to $1,200,000 prior to auction and sold with three bidders participating in the auction for $1,345,000.

Have a great week!

Kim Easterbrook – Managing Director

Hi,

There were 522 auctions reported to the REIV over the weekend resulting in a clearance rate of 75%.  284 sold at auction, 109 before auction and 129 passed in.  There were an additional 225 private sales.  As a comparison, the same time last year there were 677 auctions reported to the REIV resulting in a clearance rate of 78%.

The first of Victoria’s faster trains has officially starting taking passengers with another 22 trains to follow.  These trains will run on the Geelong, Baccus Marsh and Melton corridors among other lines with the aim to deliver more reliable and faster journeys.  The trains can reach speeds of upto 160 km/hour and along with the Melton Line Upgrade, will increase capacity by 50%.

This will be a welcomed relief to Melbourne’s west where population growth has been strong and current levels of public transports have been insuffient in keeping up with current demands.

Faster and more frequent train services from Geelong to Melbourne (and return) will make this area an even more desirable location to live.  With a much more affordable housing market then Melbourne, very good schools and now an even more commutable distance, it is very likely Geelong will experience a continuation of increased property prices and higher rents.

Over the weekend there were a mixed bag of results demonstrating there is still an element of cautiousness in the market.  This was seen at the auction of 36 Horne Street, Elsternwick.  The property had a strong campaign with many buyers inspecting the property but come auction day, only three bidders came to light.  The 3 to 4 bedroom, 2 bathroom period home in good condition (kitchen could do with an update) but well located and land size of 630 sqm is large.  The property was quoted for $2,000,000 to $2,200,000 with three bidders trying to secure with the property selling for exactly what it was worth at $2,300,000.

Have a great week!

Kim Easterbrook – Managing Director

Hi,

It was the second weekend in a row the REIV reported a clearance rate in the 80%’s.  554 auctions were reported to the REIV, 318 properties sold at auction and 126 sold before auction resulting in a clearance rate of 80%.  In addition, there were 238 private sales.  In comparison, there were 713 auctions reported to the REIV for the same weekend last year resulting in a clearance rate of 71%.

Downsizers are currently a strong segment of the property market but I am not just talking about retirees looking to buy a smaller home.  This also means family home buyers who have sold their ‘well located’ larger property to reduce their mortgage.  ‘Location’ used to be one of the most important aspects for a buyer whereas now, some no longer can afford their ‘preferred’ location and will now consider a lesser location to get the attributes of the house they require.  Demand is rising for family homes (renovated) in less desirable locations and modern townhouses (smaller land) with good family accommodation.

There has been a rise in the amount of downsizers now deciding to sell their family home, cash in and buy a smaller property.  I am unsure at this stage whether this is driven by cost of living pressures, or whether they have just had enough of sitting on their hands waiting for the market to recover and now have decided to pull the trigger.  I feel it might be a combination of both.

But there has no doubt been an increase in cost of living pressures on families who really have had no choice but to sell their family home as their mortgage repayments are now too high.  It will be interesting over the next twelve months or so to see if demand increases for quality public high school zones (eg. Balwyn High School, McKinnon Secondary College, Canterbury Girls Secondary College just to name a few) as private schools fees for some are becoming unaffordable.

AUCTION RESULT – 482 sqm of land with an old period home (no heritage overlay) went to auction on the weekend with two people bidding continuously to try and secure it.  The property at 18 Alfred St, Prahran was quoted at $2,200,000 to $2,400,000 prior to auction with the property being announced on the market at $2,400,000.  The property sold well over reserve for $2,890,000.

Have a great week!

Kim Easterbrook – Managing Director

Hi,

The clearance rate jumped into the 80%’s over the weekend and whilst too early to tell, it may suggest Melbourne’s Property Market might be turning the corner.  There were 496 auctions reported to the REIV on the weekend with 286 selling at auction, 122 selling before auction and 88 properties passing in.  In addition, there were a huge amount of private sales being 392.

The sun has started shining, word has it that interest rates will go on hold this week and there is a feeling of optimism back in Melbourne’s Property Market.  Not all open for inspections were busy, but some that were priced well achieved huge number of buyers through.  More buyers appear to be circling.  As mentioned in previous week’s, we have been receiving strong enquiry from intestate investors wanting to purchase investment properties in Melbourne (and Victoria) as they are viewing the downmarket as an opportunity to buy. It just feels like we might be turning the corner.

Good news from last week that it looks like interest rates will go on hold tomorrow.  Whilst total inflation increased from 3.6 per cent in March quarter to 3.8 per cent in the June quarter (RBA had predicted this) but ‘trimmed’ inflation fell slightly in the June quarter.  There is more talk about interest rates being cut by the end of 2024 due to disinflation being on track, but really that won’t be known until the next quarter of inflation data being released which would need to show that disinflation is on track and inflation being back in the target range in the desired time frame.

My team attended an unusually competitive auction in Boronia on the weekend.  48 Albert St, Boronia is a three bedroom, two bathroom original home on 1,180sqm.  The property was located on a main road with a large school across the road and the crowd mostly appeared to be owner occupiers rather than developers.  A huge crowd of over 100 people attended and the selling agent indicated there were 60 requests for contracts during the campaign.  A number that is unheard of, especially in the current market.  There were so many bidders we lost count but we believe there were 13 to 14 bidders in total, the property was announced on the market at $770,000 on a price quote range of $700,000 to $770,000 and sold for $970,000.

On the other side of town, a single level townhouse at 2/35 Alfred Street, Beaumaris was quoted at $1,200,000 to $1,300,000 prior to auction.  The auction attracted a few bids but then the bidding stalled at $1,240,000, the auctioneer came out after a long half time break and announced the property on the market with the property immediately selling to the highest bidder.

Have a great week!

Kim Easterbrook – Managing Director

Hi,

The REIV reported a decrease in the clearance rate to 75% on what was a low volume, cold auction weekend.  466 properties went under the hammer across the city with 239 properties selling at auction, 109 before auction and 118 passing in.  In addition, there were 153 private sales.  In comparison, the same time last year resulted in a clearance rate of 74% on 559 auctions and the final result from last week came in at 83% on 473 reported auctions.

The Melbourne Property Market has been exceptionally quiet over the past few weeks.  Auction numbers are down, new listings are low and most Selling Agents (and a lot of Buyers Agents :)) had departed Melbourne’s cold weather to have a half time break before tackling the second half of 2024.  This is not unusual and happens every year.  Now that most schools are back, we are expecting the amount of new listings to increase over the next five weeks leading into September, where it will quieten down again due to the AFL football finals.

As we know, Melbourne investors have been exiting the property market in droves over the past six to twelve months, but interestingly, we have noticed an increase in Melbourne investor enquiry who are now looking at Melbourne as a market to purchase in.  These savvy investors buy when the market down, and there is no doubt we have been in a tough property market this year.  But with vacancy rates at very low levels (which will worsen), rents rising and prices down, some investors are now considering purchasing in Melbourne due to the rare opportunity to buy in a down market.  Geelong is also an area of high interest as it offers a more affordable price point and slightly higher rental yield and also has very low vacancy rates.

A couple of strong auctions results to report over the weekend.

97A Flinders Street, Thornbury went under the hammer on Saturday and was a very active and competitive auction.  The well located, three bedroom, two bathroom home with a north facing rear was quoted at  $1,350,000 – $1,460,000 prior to auction.  The auction attracted five bidders with the property being announced ‘on the market’ at $1,550,000 and selling well above reserve for $1,681,000.

A surprising and interesting auction was the property at 1-8/24 Walsh Street, Ormond.  The property is a block of 1960’s apartments in need of work.  Land size is 858 sqm.  Usually difficult to sell, the auction attracted five bidders and more interested parties who did not put up their hand.  The property sold for $3,050,000 which was $530,000 over reserve.  The buyer pool were investors and builders looking to renovate and sell.

Have a great week!

Kim Easterbrook – Managing Director

Hi,

The REIV reported an increase in the clearance rate to 78% which is a solid result considering the amount of properties that went to auction.  602 properties went under the hammer across the city with 329 properties selling at auction, 138 before auction and 135 passing in.  In addition, there were 153 private sales.  In comparison, the same time last year resulted in a clearance rate of 75% on 638 auctions and the final result from last week came in at 79% on 824 reported auctions.

The Melboune auction clearance rate over the past few weeks has shown some improvement which is now sitting in this high 70%’s and many agents have been reporting lowish stock levels in the months to come.  There is no doubt the property market here is patchy, and investors have been selling up in droves.  Many vendors have needed to drop their price expectations in order to sell their properties.  But interestingly, we had a number of enquiries from new investors (mostly intestate) considering Melbourne as a strong option for them to invest.  The market is down, in fact Melbourne has been lagging behind most other capital cities in terms of capital growth over the past 12 months.  Melbourne still has strong population growth and a rental crisis which should continue to push rents in an upwards direction.

Investors considering Melbourne are cautious and are considering properties where the land value is not too high to ensure that the land tax bill is not excessive.  Also renovated properties are the preference to keep the rental minimum standards compliance costs to a minimum.  So whilst population growth and rental demand is high, Melbourne may just be a good option for some investors.  We know markets go in cycles, and if the clearance rate continues to stay in the mid to high 70%’s, the Melbourne property market could have hit the bottom of the “property cycle clock”.

There will be no market wrap for the next three weeks as I will be taking a little trip away with my family.  The Elite team will be here so it will be business as usual and we are always here to assist with your property needs.

Have a great week!

Kim Easterbrook – Managing Director

Hi,

The REIV auction clearance rate remains steady at 75% with 631 auctions reported over the weekend.  324 properties sold at auction, 150 before auction, 157 properties passed-in and there were an additional, 282 private sales.  In comparison, the same weekend last year, there were 713 auctions resulting in a clearance rate of 77%.

Over the past 12 months, there has been a significant increase in investors across the country selling their investment property(ies).  This has largely been driven by the increased cost of holding an investment property with higher interest rates and taxes not being covered by the rental income.  Investors have also been opting to sell their investment properties to cash in the equity to pay off their owner occupier debts.  Mortgage repayments on properties have dramatically increased over the past 18 months and home owners will do everything they can to ensure they can keep their home, and in many cases, selling their investment properties has been the best solution.

However, there is another way of buying investment properties (residential and commercial) and that is via a self managed super fund.  Over the past 12 months, there has been an increase of 11% in SMSF lending and this could largely be due to fact that people still want to have an investment property, but they don’t want it to come at a cost of their lifestyle.  A SMSF is a private super fund that you self manage and your super contributions are put into the SMSF to raise a deposit for the purchase.  Banks will then borrow money within the SMSF to allow the fund to purchase property (there are some criteria that must be met in order for the property to be an acceptable asset).

This tool can also be great for business owners who can purchase a commercial property through their SMSF and then rent it back through their business with some significant tax advantages in doing so.  Although, it doesn’t just have to be a business owner who can do this, anyone (with the financial capacity to do so) can set up a SMSF and purchase an investment property.  Whilst this can be a great tool for some to enter the investment property market, it isn’t for everyone as the costs in setting up the SMSF are high and strict audits are to be conducted on an annual basis of the fund (which is also an added expense).  Banks also require larger deposits to purchase a property and the interest rates are higher.  So it is important to speak to a professional who specialises in this area before deciding it is the right path for you.

In regards to the general feeling within the current property market, June/July are usually very quiet months of the year.  It’s cold, people don’t really want to be out and about, and vendors feel their properties are not looking their best and are holding off until Spring.  That being said, we have had a very busy month of buying thus far at Elite.  Both securing off market and on market properties, whether by private sale, expressions of interest or at auction.  So whilst it is quiet, transactions are still occurring and buying conditions at the moment are positive for buyers.

Have a great week!

Kim Easterbrook – Managing Director