The auction clearance rate dropped slightly to 74% on the weekend as a result of a huge Super Saturday.  There were 1,106 auctions reported to the REIV with 605 selling at auction, 215 sold before auction, 1 sold after auction and their were an additional 153 private sales.  In comparison, there were 970 auctions last week resulting in a 78% clearance rate and 974 auctions on the same weekend last year also resulting in a 78% clearance rate.

The number of properties on the market are at high levels for this time of year with one of the contributing factors being landlords wanting out of owning investment properties in Victoria.  Some landlords are selling in order to cash in and pay their owner occupier debt, but others are selling due to the increase in holding costs and one of those factors being land tax.

8,739 properties were listed of for sale in January and February compared to 5,811 last year with less than a third of these being snapped up by investors. With vacancy rates already sitting below 1%, this could prove to be disastrous for renters who may be forced to either live in smaller properties or move further out (even to regional centres).  On the flip side of this, it may prove good news for landlords who are entering the market, or holding on to their investment properties as rents should continue to rise.

Whilst it doesn’t seem that the State Government has a reform of land tax on their agenda, a discussion around a reform of stamp duty has surfaced.  This would involve abolishing stamp duty in favour of an annual tax which will assist home buyers to enter the market sooner.  Currently, stamp duty is approximately 5.5% to 6% of the purchase price which needs to be paid outright, on top of the deposit when the property is purchased.  This delays some buyers from purchasing due to the time it takes to save for the stamp duty and in some cases, actually discourages a buyer from purchasing at all.

First home buyers were out in force trying to secure an apartment at 2/9 Fordholm Road, Hawthorn.  The two bedroom, one bathroom, one car mostly original apartment was quoted prior to auction for $570,000 – $600,000 with the quote range lifting to $600,000 to $635,000 during the campaign.  The property attracted five bidders at auction with the property selling for $735,000 on a $630,000 reserve.  The property was on the market last year for $715,000 and didn’t sell.

The most expensive sale for last week was a six bedroom, four bathroom, six car period home on 1,940 sqm of land.  16 Rothwell Street, Ascot Vale sold for $7,250,000.

Have a great week!

Kim Easterbrook