Hi,

There were 577 auctions reported to the REIV resulting in a clearance rate of 77%.  315 sold at auction, 130 sold before auction, 1 sold after auction and 131 passed in.  In addition, there were 133 private sales.  In comparison, there were 876 auctions reported to the REIV last year resulting in a clearance rate of 74%.

Other cities across the country have been experiencing strong home value growth whilst Melbourne property price growth has slowed considerably.  Melbourne and Sydney historically always had the highest median house price however Brisbane has now surpassed both Melbourne’s median house price and unit value.

But why is Melbourne lagging behind when it once was one of the strongest property markets?  It really is due to a COVID handover.  The ongoing impact of lockdowns has been a real challenge for Victoria’s (in particular Melbourne’s) economy.  Hospitality and retail were most affected and then the Government has introduced higher taxes on both businesses and property owners.

In addition to this, compulsory minimum standards were implemented for rental properties (more $ outlayed by rental providers).  Increased land tax, then higher interest rates and costs of living with rent rises not keeping up with the higher running costs of these investment properties.

Whilst immigration is still strong (mostly from overseas), there have been some people packing up and moving intestate and others just selling their investment properties and exiting the state’s property market.

Whilst confidence in the Melbourne property market is still low, we know Melbourne is a great city to live and in time, demand for property should increase.  A few interest rate cuts will likely be all it takes for the confidence to come back into the Melbourne property market.  Historical behaviour has shown that once confidence builds in the market, other buyers will follow… and usually at a fast rate, and Melbourne could yet again become one of the (if not the) highest performing property market in the not to distant future.

But meanwhile, we had another patchy auction weekend with a mixed bag of results, some auctions had active bidding, whilst others had one bidder or none at all.

That being said, there is always an auction that has strong bidding and worth speaking about.  The auction of 25 Thomson Street, Seddon had good interest mostly from first home buyers.  The property was small but typical for the area but was well located and had a pretty double fronted facade.  The property was quoted at $1,100,000 to $1,200,000 prior to auction and sold with three bidders participating in the auction for $1,345,000.

Have a great week!

Kim Easterbrook – Managing Director