Melbourne Auction Results – October 7, 2013
By Peter Sarmas on 7 Oct 2013
No Comments yet, your thoughts are very welcome
Melbourne Auction Results October 7, 2013
The main news last week was that the Reserve Bank of Australia decided to leave the cash rate on hold at 2.5 per cent, which was no surprise.
Further RBA interest rate cuts are now looking more remote as the housing sector recovers and business and consumer confidence improves.
What Happened in the Global Economy?
Globally, the other main concern was the US government shutdown.
This significant event, which is costing the US economy 0.1-0.2 per cent of GDP a week, barely registered as a concern in the media. To prevent a catastrophic default, US Congress are continuing to meet in an attempt to further increase the US debt ceiling.
The Volatility Index, which is often also referred to as the ‘fear index’, is an important indicator in these uncertain times. It measures volatility in the US stock market. Importantly, its recent movements have been relatively normal and within the current range.
Clearance Rates Strong Despite Serious US Economic Concerns
I guess this lack of reaction to the US shutdown news tells me that global economies (including the Australian economy) are in a healthier state, and that markets assume an 11th hour solution to the current US fiscal impasse will be found.
It also tells me that consumers and businesses in Australia (and more specifically Melbourne) are not reacting negatively. In fact, Melbourne’s auction clearance rates over the weekend remained healthy on good volume numbers.
According to property research house RP Data, Australia’s capital cities grew by 1.6 per cent, taking the combined capitals index to a new high in September.
A “Technical” Recovery in the Housing Market
Tim Lawless from RP Data has described the latest figures as a “technical” recovery in the housing market.
However, these gains are being driven by the two strongest property markets in Australia – Sydney and Melbourne.
Sydney prices rose by 2.5 per cent for the month and 5.2 per cent for the September quarter, while Melbourne prices rose by 2.4 per cent for the month and 5.0 per cent for the September quarter.
According to Mr Lawless:
“The Australian housing market is broadly in the middle of a healthy growth phase. However, if the growth trend in Sydney and Melbourne continues at the same pace into 2014, then there may be some cause for concern. At the current quarterly pace of growth, capital gains in Sydney and Melbourne are running at an annualised rate of around 20 per cent, which is approaching the highs of previous growth cycles.”
Results Being Diminished by Low Investment Yields
Despite this investor-led resurgence in the property market, returns are being diminished due to strong capital gains.
RP Data reported that Melbourne remains the lowest yielding capital city. Dwellings are returning 3.6 per cent, a figure down from the 3.8 per cent high recorded mere months ago.
Mr Lawless went on to say that “…lower investment yields may act to organically dampen investor exuberance in these markets”.
However, my belief is that strong capital growth and the relative stability of property in comparison to shares will make dwellings an option in the short-term.
Melbourne Auction Results
In Melbourne over the weekend, the market took a breather from its 80 per cent clearance rate highs to record a 71 per cent clearance rate on excellent volumes.
This was a very good outcome when you take into account the fact that this weekend marked the end of the school holidays. Real estate agents reported multiple bidders at well-presented properties that were meeting market value.
Top 5 Houses
1. 6A Read Street, Templestowe $2,280,000
2. 6 Archibald Street, Box Hill $2,200,000
3. 21 Henrietta Street, Hawthorn $1,965,000
4. 30 Olinda Street, Glen Waverley $1,690,000
5. 43 Severn Street, Balwyn North $1,600,000
Top 5 Bargain Houses
1. 6 Green Street, Healesville $272,000
2. 23 Fairhaven Boulevard, Melton West $276,000
3. 3 Arleon Crescent, Cranbourne $290,000
4. 36 Thomson Avenue, Laverton $295,000
Top 5 Apartments
1. 3/14-16 Yarra Street, Williamstown $1,560,000
2. 1/35 Draper Street, Ormond $1,203,000
3. 39A Glencairn Avenue, Camberwell $1,168,000
4. 35A River Street, Richmond $1,150,000
5. 92/8-10 The Esplanade, St Kilda $1,125,000
Top 5 Bargain Apartments
1. 14/271 Ohea Street, Pascoe Vale South $250,000
2. 1/205 Mason Street, Newport $264,000
3. 5/109 Creswick Street, Footscray $273,000
4. 3/353-355 Geelong Road, Kingsville $296,000
5. 16/5 Brindisi Street, Mentone $301,000
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]
