Melbourne Auction Results – June 23, 2014

New Planning Laws Will Impact Property Prices But Auctions Results Remain Strong

In addition to the obligatory results and pulse on the Melbourne auction market over the weekend there are some significant changes coming into effect that will also be discusses in today’s market wrap.

Weekend Market Wrap

As reported by REIV there was a 72 per cent clearance rate from the 708 auctions reported over the weekend with the east and inner south showing the strongest results.

Considering the high number of properties available the average clearance rate of 71 per cent for the year illustrates just how well the Melbourne property market is performing. Even though, a number of real estate agents expect July to slow as temperatures plummet, they are already booking auctions for August. If this is a sign of what to expect, I am predicting a strong spring this year in both seller and buyer numbers. 

Planning Laws to Impact Our Property

In Melbourne the new planning laws being incorporated from July 1^st  will have a significant impact on the landscape of certain councils resulting in a positive and negative influence on house prices, rentals and streetscape appearance.

“Those asset rich retirees hoping to capitalise on the sale of the large piece of land may see 10’s of thousands of dollars disappear overnight.”

For those residents fighting medium to high density development in their suburb these new changes will serve as a win. Councils which have requested more than 70 per cent of their suburbs be allocated to the Neighbourhood Residential Zone, which restricts housing growth are thye City of Yarra, Moonee Valley, Port Phillip, Bayside, Boroondarra and Glen Eira. Some councils will require minimum sized lots of 400 square meters for subdivision meaning that many properties will remain single dwellings.

Photo courtesy of: Flickr creative commons/Ben Britten

As a result of these new changes a shortage of properties is expected.  This shortfall will see development move to the inner city area of commercial and high density zones. Over time the Melbourne landscape is set to change dramatically as more multistorey towers are built and higher density developments are undertaken in further inner city suburbs, including; North Melbourne, Fishermen’s Bend and middle subiurbs such as Manningham and Whitehorse.

“If you are looking at buying a property to live or  invest do your homework as to how the council you are buying in or nearby councils may impact your purchase.”

However, we must ask whether this is what the public want. Has the big Australian Dream of owning a home disappeared for good and what of house values?  Those asset rich retirees hoping to capitalise on the sale of the large piece of land may see 10’s of thousands of dollars disappear overnight. And the fate of the small local developer may dwindle.

It will be interesting to see how rental prices be affected if a nearby suburb has an enormous allocation for medium to high density living. Will all real estate agents now move to areas where there is more development? Will many of these properties be substandard, mass produced and built on old commercially zoned land, main roads and second tier type land?

Of course all this will take time to develop and digest, but now more than ever if you are looking at buying a property to live or  invest do your homework as to how the council you are buying in or nearby councils may impact your purchase.

A big thank you to my wonderful client Patircia who we helped sell her commercial property in Cambellfield last week.

Thank you for your trust and confidence in me!