Melbourne Auction Results – September 8, 2014
By Peter Sarmas on 8 Sep 2014
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| Melbourne Auction Results 1st-7th September 2014 | |||||
|---|---|---|---|---|---|
|
77% 683 |
Sold at Auction: | 427 | Auction Volumes: | $438.11m | |
| Passed in: | 159 | Weekend Last Month: | 532 | ||
| Sold Before: | 96 | Weekend Last Year: | 470 | ||
| Sold After: | 1 | Houses: | 82% | ||
| Unreported: | 97 | Units: | 67% | ||
Melbourne Property Market Defying The Experts
A clearance rate of 77 per cent was recorded over this Father’s Day weekend, compared to last week’s 73 per cent (which was revised down from 76 per cent).
This result is from 683 auctions reported to the REIV.
The first round of the AFL finals was also held over the weekend, which saw Geelong, Essendon, Richmond and Fremantle go down to their opposition. The elimination round this coming weekend should keep football high on the agenda for many fans.
Despite this, the REIV expects a bumper September as more than 2,100 properties are expected to be auctioned over the next two weekends, surpassing last year’s 1800 auctions for the same period.
This will be a true test for the local property market. Will the new supply meet demand, or will there be a rush of new buyers placing more upward pressure on property prices?
On the one hand, experts like Dr Andrew Wilson are telling us that Melbourne median house prices are flattening with only moderate growth. They are citing the 6.6 per cent unemployment rate in Victoria, the decline of manufacturing in Melbourne, non-existent wage growth and the forthcoming state election as distractions.
“[According to experts] Australia’s economy is facing very difficult circumstances.”
At the same time, we are seeing auction clearance rates in the 70 per cent range, and strong numbers at auctions in the inner city and the middle to outer east. Agents are also complaining about low stock or no stock and a hot market. So what’s really going on?
There is no doubt the Melbourne property market is being driven by the investor market, the young professionals market, the upsizer market and the certain migrant market.
13 Kingswood Avenue, Mount Waverley
Photo: Stockdale and Leggo
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I witnessed this firsthand when I went to bid for a client at 13 Kingswood Avenue in Mount Waverley.
The property was quoted in the $700,000 price range and eventually sold for an astounding $971,000.
Incidentally, we didn’t even bid. Yes we had looked at comparables in the area, and we were also aware that the median house price for the region had risen by nearly $100,000 since last year to $850,000.
But this was just an average-sized home (approximately 645 square metres) with 4 bedrooms and a garage in the east of Melbourne. It was in the local school zone, which may have had something to do with the bidding frenzy.
Bidders were determined to secure this Mount Waverley home
Photo: Stockdale and Leggo
The auction attracted a crowd of over 50 people, and there were more than 10 different bidders. Once the property was on the market at $860,000, the auctioneer continued to take bids from bidders who had undoubtedly missed out on previous properties in the area.
To me it didn’t make sense: there are other areas in Melbourne the same distance from the CBD with infrastructure just as good if not better than Mount Waverley, and their properties sell for much less than $1 million.
“Will the new supply meet demand, or will there be a rush of new buyers placing more upward pressure on property prices?”
It certainly goes to show how distorted the Melbourne market is at the moment, and how one or two particular migrant groups fixated on an area can influence price so much.
It is also important to note that in many areas where auctions are being used as the preferred method of sale, demand from buyers is outstripping supply.
Figures show that auctions have increased to become 30 per cent of the total number of sales, though private sales are still dominating.
On The Economic Front
The Reserve Bank chose to leave interest rates on hold yet again when it met last week, due to concerns about overinflating the two hottest property markets in Australia – Sydney and Melbourne.
According to pre-eminent economist Professor Ross Garnaut, Australia’s economy is facing “very difficult circumstances.” There is a real need for the Reserve to lower rates to a level needed to bring down the exchange rate to assist our ailing economy.
As far as the impact of lowering interest rates further and potentially creating a housing bubble, Professor Garnaut argues that other measures outside of interest rates alone should be looked at, including negative gearing.
Top 5 Houses
1. 511 Belgrave Hallam Road, Lysterfield $3,400,000
2. 16 Somers Avenue, Malvern $3,380,000
3. 44 Clarence Street, Malvern East $3,130,000
4. 66 Alexandra Avenue, Canterbury $3,020,000
5. 1B Lingwell Road, Hawthorn East $2,610,000
Top 5 Bargain Houses
1. 4 Lawson Road, Melton South $140,000
2. 16 Duncan Road, Lalor $280,000
3. 33 Kanooka Grove, Dandenong North $290,000
4. 10 Commonwealth Court, Craigieburn $295,000
5. 83 Tristania Street, Doveton $310,000
Top 5 Apartments
1. 1/42 Glen Street, Hawthorn $1,580,000
2. 2 Queen Street, Richmond $1,405,000
3. 25B Mavho Street, Bentleigh $1,300,000
4. 9B Blackshaw Street, Ormond $1,208,000
5. 2/12 Myrniong Grove, Hawthorn East $1,205,000
Top 5 Bargain Apartments
1. 6/709 Barkly Street, West Footscray $197,000
2. 2/77 Jetty Road, Rosebud $305,000
3. 1A Beccles Court, St Albans $305,500
4. 2/71 East Street, Hadfield $307,000
5. 3605/288 Spencer Street, Melbourne $330,000
Source: REIV
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