Hi,
As reported to the REIV, the clearance rate slightly dropped over the weekend to 73%. 618 auctions were held of which 451 properties sold and 167 passed in. 86 of these passed in on a vendor bid. The next two weeks will be quieter for both new listings and auctions due to the football finals and school holidays with a very minimal amount of auctions being scheduled for the AFL Grand Final weekend.
We are currently in a two-speed market where houses are generally selling under strong competition. If the property is renovated, well located, has a good floorpan and a sizeable backyard, these are the ones that are most highly sought after. If the property needs some work, some buyers are still a little reluctant to pursue these due to the unknown in what the renovation will actually cost. Overtime, as building costs stabilise, this should start to turn with more buyers willing to purchase them.
Villa units, due to the entry level price point for a property with some land are performing really well, and are under strong demand. We believe this will continue to the be the case into the future. Good quality apartments (being large, renovated, well located, with car parking) are selling well but apartment buyers are particularly fussy at the moment due to the increase in stock on the market and the choice available.
42 Chivalry Drive, Glen Waverley went to auction on the weekend and was quoted $1,350,000 to $1,450,000 prior to auction. Strong bidding by 5 parties with almost all of them being Chinese buyers (a busy segment of the market again) with the property selling for $1,707,000. The property was announced on the market at $1,700,000 however it is likely the auction had reached the reserve prior to this.
22 Percy Street, Hawthorn was another popular property that went to auction on Saturday. The pretty four bedroom, two bathroom, two car park renovated Victorian was quoted for $2,700,000 to $2,900,000 prior to auction and attracted three bidders at the auction. A strong opening bid of $3,000,000 no doubt knocked out some other potential buyers from the auction. The property sold under the hammer for $3,270,000.
Have a great week!
Kim Easterbrook
Hi,
Auction numbers for September are at healthy levels with 670 auctions being reported to the REIV over the weekend. 379 sold at auction, 130 sold before auction and 161 passed in resulting in a clearance rate of 76%. There were an additional 223 private sales. In comparison, for the same time last year, there were 702 auctions producing a clearance rate of 70%.
National Cabinet has put out a response in regards to Australia’s housing crisis pledging to build 1.2 million new dwellings over a five year period commencing 1st of July, 2024. All sounds great in theory, but in reality, it’s a target that is likely to be impossible to achieve.
An article by Leith Van Onselen in marcobusiness.com.au summarises it well but some main points as follows. According to the OECD (Organisation for Economic Co-operation and Development), Australia is already building more houses per capita than most countries (that are part of the OECD) with Australia’s 40 year average home construction pace being 160,000 per annum. National Cabinet has set a target of 240,000 per annum and the most the country has ever built in one year is 223,000 in 2017.
Interestingly, the Governments (Federal and State) are hoping to achieve these targets through developers with easing planning and zoning laws to allow for greater density. The Albanese Government’s contribution is set at 30,000 dwellings which is only 2.5% of the total target.
On the demand side, immigration is putting huge pressure on the housing market, both for buying and renting. Australia’s population is predicted to grow by 2.18 million people over the next five years of which 1.5 million is predicted to be from immigration.
With no financial incentives for developers to build more, construction costs sky high and profit margins low, it seems an impossible target that the amount of homes needed to keep up with housing demand will be achievable. Developers will not want to flood the market with stock as their incentive to build projects is to make money. Flooding the market will diminish profits.
With an unattainable supply plan and without a fix on demand, property prices and rents will likely to continue to rise as demand continues to outstrip supply.
14 James Street, Surrey Hills went to auction over the weekend. The auction of the unrenovated, three bedroom, one bathroom home on 623 sqm attracted 3 bidders at auction. The auction was very slow and the bidding commenced on two vendor bids, $1,800,000 and $1,825,000 until one party jumped in. The property ended up selling for $2,162,500 with the property being announced on the market for $2,000,000.
In Geelong, an ex commission house went to auction which required a lot of work (was unliveable) but the property was on 624 sqm of land. The auction of 19 Irwin Court, Whittington attracted 4 bidders with the property announced on the market for $350,000 and selling for $385,000.
Have a great week!
Kim Easterbrook
Hi ,
Auction numbers decreased this week with 676 auctions reported to the REIV resulting in a clearance rate of 74%. 365 sold at auction, 135 sold before auction and 176 passed in. In addition there were 136 private sales. Similar numbers on the same weekend last year with 661 auctions reported to the REIV and a clearance rate of 72%.
The Reserve Bank is due to meet again tomorrow and many are predicting interest rates will remain on hold. Some Economists are suggesting that we may actually have reached the peak and interest rates may start to come back down next year. Once we have reached interest rate stability this will result in an increased number of buyers in the market as confidence in the property market grows. This however will be needed to balance out the market if stock levels are predicted to rise as what has been suggested. The apartment and villa unit market could be have a short term surge in listings as landlords offload their investment properties.
Coming into next year though, stock levels are likely to come back down as the vendors who have been sitting on their hands and vendors under financial pressure would have sold. If you are thinking of buying, this Spring season may offer opportunities that we may not see again. The growing confidence in the property market added to population growth may encourage property prices to go up again in 2024.
Some strongly contested auctions on the weekend including 59 Gooch Street, Thornbury went to auction on Saturday and the two bedroom, one bathroom, structurally renovated terrace home was popular at auction with five bidders trying to secure the property. The property sold for $1,291,000 which was $171,000 over the reserve price.
A family home in Camberwell was also in strong demand with four bidders participating in the auction. The property had a price guide of $3,500,000 to $3,800,000 and sold for $4,515,000 after being announced on the market at $4,100,000.
Have a great week!
Kim Easterbrook
Hi ,
We are very excited to announce that Elite Buyer Agents has expanded to the Gold Coast being managed by Senior Buyer’s Agent, Jenni Wright. Jenni, a highly experienced Buyer’s Advocate, has been in real estate for over 27 years and loves to navigate the “in demand” Gold Coast property market with complex negotiations and low stock levels. We are thrilled to be able to expand our services further across the country and welcome her back to the Elite team.
Melbourne Property Market Update
The clearance rate dropped slightly over the weekend with 706 auctions reported to the REIV. 394 properties sold at auction, 133 sold before auction and 179 passed in. There were an additional 276 private sales. We are experiencing steady clearance rates in the 70%’s week in, week out, but this week, the amount of sold properties increased both by auction and private sale. In comparison, for the same weekend last year, 649 properties went to auction resulting in a clearance rate of 69%.
The Spring season is predicted to be a busy one. This Saturday is a super Saturday with more than 1,000 auctions scheduled and more than 3,000 homes scheduled to go to auction over the next 3 weeks. REIV figures are suggesting that the record for the amount of auctions in the first week of September, which was set in 2015, of 932 auctions will be broken.
The higher stock levels are due to some vendors now having confidence that the property market is stable (even with all of the interest rate rises) so have decided now is the time to put their property on the market. In addition to this, there will be a short term spike in rental properties coming onto the market with some landlords making the exit from investing in property. Some owner occupiers will be offloading their properties due to the unaffordability of increased mortgage repayments. And naturally vendors feel Spring is the best time to sell due to improved weather and their properties/gardens generally looking better this time of year.
Now could be as good time as ever to purchase a property as the spike in listings will likely be short term. The property market is expected to stay balanced as buyers are also building confidence that interest rates are near the peak and it is expected that the rental market could become extremely tight and rents ‘should’ be on the rise as well.
The villa unit market is a strong segment of the market due to buyers having decreased budgets as a result of rising interest rates. Villa units can still offer good accommodation, a backyard (but are on a subdivided block) at a more affordable price point of $1m (give or take a little).
6/39 Brownfield Street, Mordialloc is a three bedroom, one bathroom, double garage modern unit which was quoted at $850,000 to $935,000 prior to auction. The bidding opened strongly at $980,000 which knocked out most of the buyers there to bid. The bid however was challenged by 2 other parties but the originally bidder successfully purchased the property for $1,010,000.
4/12 Florence Street, Surrey Hills was another villa unit that performed well at auction on the weekend. The updated two bedroom, one bathroom, double garage villa unit was quoted at $800,000 to $880,000 prior to auction. An offer of $960,000 was acceptable to the vendor prior to auction so the auction was brought forward. There were four bidders who challenged the offer with three of the bidders over $1,100,000. The property sold for $1,170,000.
The higher end of the market is still actively transacting but facing the challenges of limited stock. The most expensive sale reported in Melbourne last week was a three bedroom, four bathroom apartment in Toorak which sold for almost $8,500,000.
Have a great week!
Kim Easterbrook
Gold Coast Property Market Update
Hi ,
I am very excited to bring Elite Buyer Agents to the Gold Coast and help both both owner occupiers and investors in purchasing property in what is a very different property market to Victoria.
Selling agents generally do not quote property prices on property which means for buyers, it can be very easy to overpay when negotiating a property purchase. That is why it is important to have representation from a Buyer’s Agent who understands the value of property and has local market knowledge.
There is strong demand for property on the Gold Coast which is largely driven by migration both internally (from other states around the country) and externally (from overseas). It is predicted that the population is to double over the next 20 years to over 1,000,000 people.
Many people are moving to the Gold Coast for the warmer weather and more relaxed lifestyle. The quality and ease of accessing medical care is also a deciding factor, as is the emergence of many fine dining restaurants, theme parks and the work from home experience.
In some areas of the Gold Coast, it is still possible to purchase a house for under $1,000,000 which makes it much more affordable than areas of Melbourne and Sydney. Waterfront properties are also of strong interest and are possible to purchase sub $2,000,000. The apartment market in Surfers Paradise and Broadbeach are popular for Investors, empty nesters and young couples. Due to the lack of available rental properties, rental yields on the Gold Coast are generally higher than what capital cities such as Melbourne and Sydney achieve. All markets are underpinned by the lack of stock, especially anything with a water view which is the Gold Coast is famous for.
Have a wonderful day.
Jenni Wright – Senior Buyer’s Agent
Hi ,
The clearance rate jumped up back into the high 70%’s again with 535 auctions reported to the REIV. 317 sold at auction, 98 sold before auction, 1 sold after auction and 119 passed in. There were an additional 127 private sales. The same time last year there were 604 auctions reported resulting in a clearance rate of 71%.
The Andrews Government announced last week that a proposal to cap rental increases on investment properties was now completely off the table. Whilst it appears to be bad news for tenants, the reality is that such a proposal, on top of increased land tax, new compliance legislation, interest rate hikes and general cost of living… could have been the last straw for many investors. The proposal would have been counter productive and likely would have further lessened the supply due to more investors selling their investment properties. In the long term, this would have resulted in even higher rents. Daniel Andrews was quoted in saying ‘he is ruling out anything that would result in less housing’.
219 Page Street, Middle Park went under the hammer and had active bidding from two buyers. The two bedroom, one bathroom, single fronted period home had been structurally renovated and is located in one of the best streets in Middle Park. The property was quoted at $1,800,000 to $1,900,000 prior to auction and sold under the hammer for $2,050,000.
Have a great week!
Kim Easterbrook
Geelong Property Market Update
In recent weeks, Geelong, as did other areas of the State, received the bad news that the Commonwealth Games was not going to be held in Victoria. But some good news followed from the Federal Government that Hanwha Defence Australia had been awarded a contract to build 129 Redback infantry fighting vehicles at its Avalon facility north-east of Geelong in Victoria. A project expected to cost $5b to $7b and expected to create 600 direct jobs and many more indirect jobs.
In addition to this, Geelong was the successful tender for the new Convention and Exhibition Centre which will include the construction of a purpose-built convention and exhibition space. The precinct will also be home to retail and food offerings, a large public plaza and a 200-room Crown Plaza hotel.
Just more reasons to add to why the population of Geelong will likely to continue to grow strongly and add pressure on housing supply. There have been a low level of properties on the market to sell this year, as with most areas within the state, but interestingly over the past few weeks, that there appears to be an increase in stock on the market and an increase in buyers attending open for inspections. Whilst too early to read anything into this, it could represent is a start of an active and balanced Spring season and hopefully back to some kind of normal selling and buying conditions.
57 Laura Avenue, Belmont went to auction over the weekend which is an updated three bedroom, one bathroom home on 663 sqm attracted four active bidders but passed in for $746,000. It sold immediately afterwards for $752,000.
Vicky Whittaker – Geelong and Regional Victoria Office
Hi ,
The clearance rate dropped to 71% over the weekend with 555 auctions reported to the REIV. 395 properties sold with 319 being at auction, 76 before auction and 160 properties passed in. There were an additional 110 private sales. As a comparison, for the same time last year, the clearance rate was 69% on 503 auctions.
Whilst demand for property is still strong, there are varying price points where the demand is strongest and weakest. The sub $2m market is the strongest price point as a direct result of interest rate rises and increased cost of living. Banks assessment rates have increased dramatically over the past 12 months which has affected how much a buyer can borrow to purchase a property. Reports from selling agents are consistent across the board with the amount buyers with $4m plus budgets reducing and buyers with sub $2m increasing. That being said, there is still a constant demand for good quality family homes in the inner/middle ring of Melbourne.
The auction of 18 Belson Street, Malvern East is a good example this. The well located, four bedroom, four bathroom period home which has been well renovated throughout was quoted for $6,000,000 to $6,400,000 prior to auction. The auction had 3 active bidders and one could argue, had this gone to market say 12-14 months ago, there would have likely been more parties there to bid. The auction still produced a solid result selling for $6,605,000 with the property being announced on the market at $6,500,000.
A huge result in Pascoe Vale South with a three bedroom, one bathroom 1950’s home on 533 sqm of land selling under the hammer well above reserve. The property was quoted prior to auction for $1,250,000 to $1,350,000 with the bidding commencing at the bottom of the range. Three bidders participated in the auction pushing the price to $1,640,000 which was almost $300,000 over reserve.
David Easterbrook
Hi ,
Auction numbers are on the rise and last weekend there were 523 auctions being reported to the REIV. 302 sold at auction, 87 sold before auction, 1 sold after auction and 133 passed in producing a 75% clearance rate. There were an additional 124 private sales. Interestingly, a similar amount of auctions were held on the same weekend last year being 509 which resulted in a lower clearance rate of 68%.
Victorian landlords have been selling their investment properties at the highest rate in over five years. According to PropTrack, 29 per cent of sales across the state in June were landlords offloading their investment properties. Reports in the media have been circulating that this has been due to the latest increase in land tax which has further increased the cost of holding an investment property, along with the recent costs to ensure properties were compliant in accordance to the latest rental legislation. However, the feedback we are receiving from our landlords is that they are selling to access their equity to pay off their owner occupied debts due to rising increase in interest rates. Cost of living pressures have been the real reason why we are seeing this rise.
If the levels were this in July, than the levels we are going to be seeing over the next few months leading into Christmas could be even higher, based on the enquiry from our own client base we are receiving. This could be disastrous in the long term for tenants who are already struggling to find rental properties with vacancy rates at very low levels. The Victorian Government are making noises about implementing rental caps which will allow landlords to lift rent only once every 2 years and potentially imposing caps on any rental increase. This will only make the rental crisis worse and we could see critical shortage of housing for renters in the years to come.
Demand from buyers for properties sub $2m is increasing as interest rates rise, buyers budgets have generally decreased and therefore their expectations need to come into align with what they can get for their budgets. 15 Gnarwyn Road, Carnegie is a four bedroom, three bathroom home with a double garage, updated internally but floorplan has only been partly structurally renovated. The property is on 500 sqm and well located but it does have a shared driveway and units at the rear. The property was quoted $1,350,000 to $1,485,000 prior to auction and the auction started on a vendor’s bid of $1,250,000. Four bidders pushed the price to $1,580,000 where the property sold which we believe is $130,000 over the reserve price.
Have a great week.
David Easterbrook
Hi,
Auction numbers still remain low with 397 auctions being reported to the REIV resulting in a clearance rate of 78%. 226 properties sold at auction, 85 before auction and 86 passed in. In comparison, there were 511 auctions reported for the same time last year resulting in a clearance rate of 67%. There were a further 122 properties that sold via private sale and off market campaigns.
The REIV released their June quarter 2023 Median Prices over the weekend with metropolitan houses dropping 1.1% to $937,500 and metropolitan units climbing 3.2% to $630,500. Regional Victoria had a house price rise of 0.6% statewide to $604,500 and unit medians declined 2.6% to $411,500.
Interestingly, according to the REIV metropolitan units in the middle ring of Melbourne had the strongest growth with Mount Waverley climbing 25% to $1,245,000, Hampton units rising 20.1% to $1,105,000 and Brighton East climbing 14.9%. Whilst some of this data can be skewed by the sale of higher price point properties, I do believe there is something in this data that shows that buyers may be looking at smaller properties and cheaper price points due to rising interest rates. This could be a result of the bank not allowing buyers to borrow as much money or buyers just being cautious and not wanting to put themselves at risk of mortgage stress.
4/85-87 Miller Street, Carnegie went to auction on the weekend which was quoted at $740,000 to $770,000 prior to auction. Three bidders participated in the auction and the property was announced ‘on the market’ at $750,000. The property sold under the hammer to a young couple for $779,000.
For many months now, houses in Cheltenham generally speaking have been selling for strong prices. 27 Renowden Street, Cheltenham was quoted $1,250,000 – $1,350,000 prior to auction and is a large but dated, 5 bedroom, 3 bathroom, 2 car garage home located very close to the Moorabbin Airport. Four bidders competed for the home which sold for $130,500 over reserve for $1,480,500.
Have a great week.
David Easterbrook
Hi ,
Auction numbers were down again this week with 385 auctions being reported to the REIV resulting in a clearance rate of 76%. 209 properties sold at auction, 82 before auction and 94 passed in. In comparison, there were 481 auctions reported for the same time last year resulting in a clearance rate of 67%. There were a further 141 properties that sold via private sale and off market campaigns.
Investors may soon be in for some long awaited good news with signs that the vacant property market is tightening even further. Whilst this is positive for Investors, this unfortunately is not great news for Renters. CoreLogic’s latest data shows that the median rent for Melbourne increased by 3.9% in the June 2023 quarter and the current vacancy rate is sitting at 0.8%.
Rental demand is rising due to increased overseas migration, unaffordability to buy into the property market and a decrease in supply due to some Investors selling their investment properties (mostly due to higher running costs resulting from higher interest rates, increased land tax and new compliance legislation). Large numbers of prospective tenants are being reported at weekend open for inspections. We have also seen this within our company and winter seems to not be deterring people like it has in the past.
Investors who ride out the next 12 months may very well reap the rewards with not only rents likely to keep on rising, but if interest rates start declining next year as predicted, property prices could continue to rise which will in turn could result in some good capital growth levels for some Investors.
A strong result was recorded in the western suburbs with 11 Myrtle Drive, Maidstone going under the hammer. The four bedroom, four bathroom, double garage modern home attracted strong interest from local home buyers with the property quoted at $1,650,000 to $1,750,000 prior to auction. The property sold under the hammer for $1,807,500 which was $57,500 more than its reserve.
Have a great week.
David Easterbrook
Hi,
There were lower auction numbers over the weekend as a result of school holidays and also being in the middle of winter. 383 auctions were reported to the REIV resulting in a clearance rate of 73%, which is the lowest level it has been for quite some time. As a comparison, there were 524 auctions for the same time last year resulting in a clearance rate of 63%. In addition, there were 278 private sales which is actually a reasonably strong weekly number. This could be due to the increase in off market activity which is quite normal to occur over the winter period.
According to CoreLogic, house values across the country rose for the fourth consecutive month in June but growth seems to be slowing down. Home values have risen 2.8% over the quarter to end of June. The drop in the clearance rate may demonstrate the market sentiment is falling again (we may need a few more weeks of data to understand if that is really happening) which may open a small window over the colder months for buyers who have been battling low stock numbers and strong competition on some properties.
All eyes with be on the RBA tomorrow watching to see if interest rates will be lifted once again. Opinion is divided as to whether this will happen or not but it if it doesn’t happen in July, it seems likely to happen in August. Either way, it is likely we will see interest rates rise even further over the next few months.
The auction of 1/1 Mahvo Street, Bentleigh was a very competitive auction. The property is a three bedroom, two bathroom unit very well located close to Centre Rd. Whilst only 3 active bidders, it appeared there were many others there that didn’t get a chance to put their hand up. The property was quoted $1,100,000 – $1,200,000 prior to auction, announced on the market at $1,240,000 and sold for $1,415,000.
With interest rates rising, buyers are looking further at compromises to get into the property market. This isn’t just moving further out from the city, but looking at smaller properties (being villa units/townhouses on subdivided blocks and perhaps even apartments).
1/30 Shelley Street, Elwood is a two bedroom, one bathroom apartment with a courtyard. The property was quoted $550,000 to $600,000 prior to auction with four bidders participating and the property selling $30,000 above reserve for $630,000.
Have a great week.
David Easterbrook
