Domain’s preliminary clearance rate remained stable at 57% across 900 reported auctions (Super Saturday), with 511 properties sold at auction, 133 withdrawn and 256 passed in. By comparison, the clearance rate for the same weekend last year was 68%. The REIV also reported an additional 529 private sales.
While auction clearance rates are declining nationally, Melbourne’s auction market continues to show reasonable resilience. There is no doubt the property market remains highly price sensitive, with very few runaway results being achieved. Investor activity has declined significantly; however, owner occupiers remain active. Many properties are passing in at auction with multiple bidders before selling immediately afterwards through post auction negotiations.
As the Federal Government moves to legislate its proposed tax reforms, many investors have adopted a wait and see approach until there is greater certainty around the path forward. However, interest in commercial property is increasing, largely due to the ability to continue accessing negative gearing benefits.
Commercial property also offers a range of other advantages, including higher rental yields, strong historical capital growth with solid future capital growth potential, and tenants typically paying most outgoings such as council rates, water rates, land tax (in some circumstances), owners corporation fees and building insurance. In addition, commercial tenancy legislation is generally less restrictive than residential tenancy legislation.
Elite Buyer Agents has a dedicated commercial property division managed by David Easterbrook. Over many years, David has assisted clients in acquiring offices, industrial warehouses, factories, medical centres, retail premises and a broad range of other commercial assets.
We have already seen an increase in buyer enquiry and activity within the commercial property sector, and we expect this trend to continue should the proposed negative gearing reforms be legislated.
Have a great week.
Kim Easterbrook – Managing Director
