Melbourne Auction Results – February 9, 2015

This week’s results include sales from the 22/12/2014 through to 7th February, 2015.

Inspections Up But Clearance Rates Floundering

A clearance rate of 61 per cent was recorded between 22nd December 2014 and 7th February 2015.

Of the 412 auctions reported to the REIV, 251 sold and 161 were passed in, 94 of those on a vendor bid.

Auction activity will continue to grow in coming weeks, with more than 1,000 auctions scheduled for the first weekend in March.

Photo Source: thehomepage: 1A Arcadia Street Box Hill South

In a year that might be remembered by some as a missed opportunity, 2014 did not enter any bubble territory as predicted but instead showed stellar growth – in particular the Eastern Seaboard states with Melbourne growing by 8.1% yoy (RP Data).

Realistically predicting the future is always fraught with danger, therefore we need to look at current emerging trends and property drivers – interest rates, consumer confidence, unemployment and affordability. As far as affordability goes, fierce competition between major and second tier lenders and the latest RBA cut, have ensured interest rates have stayed at record lows, despite rising property prices. 

Realistically predicting the future is always fraught with danger, therefore we need to look at current emerging trends and property drivers 

Any predictions of a rate rise in 2015 appear to have vaporised as unemployment levels peak and the Australian economy begins to improve off the back of a falling Australian dollar. Yes Westpac’s Bill Evans called this months rate cut correctly yet again!

The Reserve Bank met last week and surprisingly reduced rates a further by 0.25% to 2.25% for the first time in 18 months, citing concerns over a stubbornly high Australian dollar. A change in sentiment and rhetoric from the Reserve Bank, means further rate cuts of 0.25% are on the cards and even a possible third rate cut to 1.75% by years end. Concerns of near zero percent interest rates overseas as a result of printing of money in Japan and now the EU means the Aussie dollar needs to stay low.  Second tier lenders and the majors were quick to pass on the rate cut with Westpac benevolently cutting beyond the RBA’s  0.25% to 0.28%. Happy Days!

Economists see some our biggest exports – tourism, education, property and manufacturing stimulating the growth in our economy with a falling dollar, in turn helping wage growth, consumer confidence and spending. Whether this spending translates into the purchase of big-ticket items like property is yet to be seen but stability in the housing market should prevail.

A lower interest rate environment coupled with the current volatility of the local share market means that returns on investments are at an all-time low. Investors will see property as a safe alternative and many will continue to leverage purchases through their SMSFs, I expect this year.

The major danger we see on the horizon this year is oversupply of certain property types from a price and rental perspective. According to Core Logic RP Data, rental growth is sitting at its lowest point in more than 10 years. The rental market will see a substantial shift as investors chase returns and tenants are spoilt for choice.

Photo Source: thehomepage: 5 Kingswood Rise, Box Hill South

Street Advocacy News: Buying & Selling Property With Street News

Our first real hit out this week and boy has it been busy. There is a certain buzz amongst consumers and to me, the property market has not only picked up from where it left off last year but gone up another gear! Unfotunately though, auction clearance rates over the weekend did not reflect this new upbeat in sentiment.

Interest rates and property prices are linked, so it’s no coincidence buyers are beginning to take the plunge into the market, as waiting on the sidelines has cost them a 45% increase in median prices growth (in Melbourne) since 2009.

On Saturday we inspected 6 properties and all were busy with no less than 14 plus groups. This, for properties which ranged in price from a unit quoted at $350,000 plus to family homes in Box Hill Sth quoted at over $1million, traffic was thick and fast.

My Take

I am expecting an absolute bumper year although supply at the moment seems to be plenty in the suburbs we inspected but judging by this weekend’s auction results, buyer’s appear still to be gun-shy. 

Beware of units in particular new and off the plan. One bedroom properties in or close to the CBD will see very little or no capital growth for many years to come and surrounding areas will suffer badly due to expected oversupply. In St Kilda there are more than 2,000 units coming onto the market over the next few years, killer!

 The rental market will see a substantial shift as investors chase returns and tenants are spoilt for choice

Finally, go against the trend. The biggest secret to picking good real estate is by location not by property and rental returns as many will have you believe! As the rental market gets squeezed with the onset of mass developments, burnt investors will be heading for the exits, make sure you aren’t one of them!

Engage an advocate who conducts extensive due diligence and research and puts the client first!

TOP 5 HOUSES
1. 35-37 Pearse Road, Blairgowrie $2,400,000
2. 30 Fawkner Avenue, Blairgowrie $2,150,000
3. 38 Baily Street, Mount Waverley $1,888,000
4. 32 Dundas Place, Albert Park $1,880,000
5. 6 Bishop Court, Mount Waverley $1,480,000

TOP 5 BARGAIN HOUSES
1. 6 Solley Court, Carrum Downs $267,500
2. 6 Rowan Court, Frankston North $269,500
3. 98 Purchas Street, Werribee $300,000
4. 403 South Gippsland Highway, Cranbourne North $312,500
5. 4 Gregory Place, Melton West $318,000

TOP 5 APARTMENTS 
1. 3/87 Albion Road, Box Hill $975,000
2. 3/6 Russell Court, Mentone $905,000
3. 10/959 Burke Road, Camberwell $858,000
4. 41A Grandview Road, Niddrie $772,000
5. 2/39 Brooks Street, Bentleigh East $750,000

TOP 5 BARGAIN APARTMENTS
1. 603/740 Swanston Street, Carlton $225,000
2. 4/12 Allard Street, Brunswick West $261,000
3. 2/56 Beaumont Crescent, Lalor $335,000
4. 1/32 Newham Grove, Ormond $345,000
5. 3/52 Alameda Avenue, Mornington $349,000

Source: REIV

For a basic snapshot of your suburb’s performance or a property report customised for your property, request a Free Market Report.

If you are thinking of buying, selling or investing and would like a FREE 5 minute chat 
with Street News Director Peter Sarmas, please contact him on 0418 740 606 
or via email at [email protected]