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