Melbourne Auction Results – August 18, 2014
By Peter Sarmas on 18 Aug 2014
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| Melbourne Auction Results 11th-17th August 2014 | |||||
|---|---|---|---|---|---|
|
75% 601 |
Sold at Auction: | 361 | Auction Volumes: | $352.78m | |
| Passed in: | 153 | Weekend Last Month: | 583 | ||
| Sold Before: | 86 | Weekend Last Year: | 599 | ||
| Sold After: | 1 | Houses: | 76% | ||
| Unreported: | 91 | Units: | 72% | ||
Leading Economist Pours Cold Water Over Bubble Talk
There were 601 auctions reported to the REIV this weekend, and the clearance rate was 75 per cent.
According to the institute, more than 47 suburbs in Melbourne have registered a clearance rate over 90 per cent this year. Those with the greatest improvement in comparison to last year included Croydon, Watsonia and Aspendale.
An Opposing View To A Property Collapse
When leading Westpac economist Bill Evans comments on the property market, my ears prick up and I listen.
Rarely has this man been off the mark with his predictions and his latest article in Business Spectator sheds light on what have become somewhat murky waters in the property market.
Why murky, you ask? The sounds of a bubble are getting louder, and yes, with every boom there is a bust, but many experts have been calling a bubble for years now and property prices have continued to defy them. Melbourne prices are up 9.8 per cent and Sydney house prices are up over 15 per cent for the year.
But have we peaked?
Consumer Sentiment Improves
The Westpac Consumer Sentiment Index increased by 3.8 per cent in August, which Mr Evans called “a pleasing result”.
The index is now only 1.2 per cent below the level it was prior to the federal budget announcement on May 13, which has been blamed for much of the lost confidence.
According to Mr Evans, the repeal of the contentious carbon tax and resistance in the Senate regarding many unpopular budget measures has buoyed consumer confidence.
Competitive Home Loan Rates To Drive More Investment Activity
This month the Reserve Bank left rates on hold and revised economic growth in Australia from 3.5 per cent back to 3 per cent. This is considered the new norm for our economy.
Despite the fact that the cash rate remains unchanged, competition amongst the second tier lenders and the big four has heated up, and five-year fixed rates have fallen below 5 per cent.
“The repeal of the contentious carbon tax… has buoyed consumer confidence.”
This means that funding an investment property has become even cheaper when the difference between borrowing and the median rental return for a property in Melbourne and Sydney is around 3.5 to 4.0 per cent.
Of course this doesn’t take into account any costs associated with purchasing or running the investment.
However, bank at-call rates are plummeting to less than 3 per cent, forcing investors to look for higher returns as inflation alone would erode any gains at these levels. So higher yielding shares and property with potential capital growth and return appear to be high on the agenda for investors.
Photo: teambee, Creative Commons
Signs The Market Is Strengthening
Westpac expects rates to stay on hold for at least another 12 months and current investor-led housing activity is expected to continue. Westpac’s research points to property prices falling when interest rates begin their upward cycle and this looks to be some way away for now.
Two more critical data releases have added further weight to a strengthening market.
One is the jump in the Time to Buy a Dwelling Index, which is up 9.7 per cent post-budget.
“Higher yielding shares and property with potential capital growth and return appear to be high on the agenda for investors.”
The other is the Westpac-Melbourne Institute House Price Expectations Index, which rose 7.6 per cent to be up 20.6 per cent from its May figure.
On the ground, stock levels are strengthening in August and being met by demand for the most part.
The deeper we go into the AFL finals season, the fewer the auctions I would expect to see. However, many agents already booking out Saturdays will inadvertently place their vendors in a precarious position and possibly create some bargain auctions on finals weekends.
Street Advocacy News: Buying & Selling Property With Street News
Buyer advocate Peter Sarmas was pleasantly surprised by a recent experience with an Ivanhoe agent.
After a couple of very ordinary experiences with real estate agents lately, I had my faith restored by an agent in the Ivanhoe area.
Knowing I was very particular about the type of property I wanted to find for my client, he called to make me aware of an off-market opportunity.
The home, which was only minutes away from the main Ivanhoe shops, the station and amenities in a sought-after location, was perfect for my client, who was looking to buy a low maintenance property for long-term growth.
Top 5 Houses
1. 58 Hanby Street, Brighton $3,990,000
2. 18 Arranmore Avenue, Black Rock $2,905,000
3. 46 Somerville Street, Doncaster $2,641,000
4. 51 Sutton Street, Balwyn North $2,430,000
5. 25 The Grange, Malvern East $2,250,000
Top 5 Bargain Houses
1. 1 Vasey Court, Melton South $180,000
2. 19 Armytage Way, Wyndham Vale $266,000
3. 22 Irving Court, Rosebud West $310,000
4. 38 Langdon Crescent, Craigieburn $350,000
5. 7 Creighton Way, Craigieburn $350,000
Top 5 Apartments
1. 17 Albert Place, Richmond $2,530,000
2. 15E/481 St Kilda Road, Melbourne $1,570,000
3. 2/73 Maud Street, Balwyn North $1,310,000
4. 18 Newry Street, Carlton North $1,225,000
5. 186 Tramway Parade, Beaumaris $1,111,000
Top 5 Bargain Apartments
1. 31/116 Inkerman Street, St Kilda $216,000
2. 2/13 Tom Roberts Parade, Point Cook $285,000
3. 3/91 Lower Heidelberg Road, Ivanhoe $303,500
4. 5/57 Chapel Street, St Kilda $306,000
5. 2/12 Barningham Street, Brunswick $315,000
Source: REIV
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