Hi,

There were 573 auctions reported to the REIV resulting in a clearance rate of 79%.  322 properties sold at auction, 128 before auction, 1 after auction and there were an additional 255 private sales.  In comparison, the same weekend last year there were 817 auctions reported to the REIV resulting in a clearance rate of 76% and last week’s final result was 813 auctions reported resulting in a clearance rate of 78%.  The Melbourne property market does still feel quite price sensitive, where buyers are generally cautious about what they are wanting to pay due to high cost of living, higher interest rates and generally a level of caution still in the market.

CoreLogic released it’s data last week showing that Melbourne’s median ‘dwelling’ value has fallen into sixth place with only Hobart and Darwin behind it.  Melbourne’s median ‘house’ price though is still the third most expensive with only Sydney and Brisbane ahead.  There has been a lot of media reporting last week that Melbourne’s ‘house’ price values have slipped to sixth against most capital cities in the country but the reporting is inaccurate as it is the ‘dwelling’ value that has fallen to sixth position across the country.

CoreLogic’s ‘dwelling’ value also includes units and apartments which gives an average of all property prices against all types of property.  According to Tim Lawless (CoreLogic’s research director), a third of all housing stock in Melbourne is medium to high density, where has Perth and Adelaide has a multi unit stock of around 16%.  Units and apartments have a lower price point, and have been slugglish in capital growth for a number of years now and therefore pulls the average ‘dwelling’ averages down.  This therefore skews the data as they are not really comparing ‘apples with apples’.

With Melbourne’s ‘dwelling’ median now sitting in sixth position against other capital cities across the country, it definitely shows that if a first home buyer is looking to enter the market, Melbourne does become an appealing option with a healthy supply of one and two apartments and townhouses.  But this could be shortlived as the number of apartments proposed for construction are now sitting at its lowest since 2007 which will in time, affect the overall supply on offer for perspective purchasers and tenants.

In some positive news for Victoria’s property market, investor loans have increased 9 percent (albeit, lower than the national average) and there are an increasing number of investors circling Melbourne viewing it as a good opportunity to purchase in.

Have a great week!

Kim Easterbrook – Managing Director