Hi,
A huge auction weekend in Melbourne with 979 auctions being reported to Domain. 594 selling under the hammer, 263 passing-in and 122 were withdrawn. This resulted in a preliminary clearance rate of 61%, a stronger clearance rate than I was expecting with all the uncertainty in the world and likely interest rate rise tomorrow. The sentiment in the Melbourne property market feels lacklustre which is opening up opportunities for some buyers with eased buying conditions.
The Victorian government has put forward another proposal (in addition to disclosing auction reserves prior to auction) where vendors are now to provide building and pest inspection reports for properties that are being sold. Building and pest inspections typically cost anywhere from $700 to $800 each and are an important part of a buyer due diligence. It is not uncommon for a diligent buyer to pay for two or three building inspections (sometimes more) in their purchasing journey.
The proposed legislation will require a vendor, as part of the vendor’s statement, to provide both a building and pest inspection report which would need to be completed within 3 months before the sale. This is currently legislation in the ACT and commonly provided by the vendor in NSW. Whilst I believe there is good intention with this legislation, I would be very cautious in relying on a report that is paid for, and therefore potentially favourable to the vendor. I would still encourage my clients have a building and pest inspection report produced by our trusted building inspectors who are very experienced and qualified to provide a unbiased opinion.
However, I do believe this legislation will encourage vendors to have more repair works completed prior to putting their properties on the market, and therefore some properties will be coming to market in a better condition than they would have prior. This is proposed for 2027 if the current government is re-elected.
The RBA (Reserve Bank of Australia) are tomorrow, due to announce their next interest rate move with many expecting another interest rate rise. This is due to high inflation, tight jobs market and now the concern of higher energy/fuel prices due to the Iran war. Whilst this potential interest rate rise didn’t seem to affect last weekend’s auction clearance rate, it can only help buying conditions in the immediate future.
Have a great week.
Kim Easterbrook – Managing Director
