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