Melbourne Auction Results – September 16, 2013
By Peter Sarmas on 16 Sep 2013
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Melbourne Property Market Confidence Tested This Weekend
We knew going in that this weekend was going to tell us some important things about the health and direction of the Melbourne property market.
To my surprise, the Melbourne auction clearance rate was a strong 76 per cent on a total of 832 reported auctions; although approximately 84 results are still yet to be gathered by the Real Estate Institute of Victoria (REIV).
Compared to last week’s 73 per cent clearance rate and last year’s 61 per cent clearance rate, the latest numbers look promising. This could certainly be a sign of things to come, though there are a number of factors we should consider before we jump in and call it a seller’s market.
Why is The Market So Strong?
A number of contributing factors seem to have kicked in at the same time, resulting in this renewed strength in the property market.
Auction Results Hinge on Consumer and Economic Certainty
The most important factor has been consumer confidence. Have you noticed doom and gloom reports about the US economy and the Eurozone aren’t dominating front page headlines anymore?
The US stock market is near its pre-GFC high (it has gone up nearly 50 per cent since 2008), while the Japanese, European and Chinese economies are recovering well.
It’s even difficult for the doomsayers to throw mud at Australia’s current economic climate. The Australian stock market is at a 5 year high. The Westpac Melbourne Institute Index increased by 4.7 per cent in September, the highest for the index since December 2010. Interestingly enough, this was the last time we witnessed record property prices and the peak of the market.
It seems the latest change in government has reinstated some much needed stability. The Coalition’s declaration that Australia is “under new management” would have many assured that the economy is heading in the right direction.
A Shortage of Quality Stock
What’s also very interesting is that many real estate agents are still echoing what I witnessed a few weeks ago – a shortage of quality stock.
Our buyer advocates are reporting that they are in fierce competition when it comes to quality stock. Competition doesn’t appear to be from any one type of buyer, though investors are out in full force.
Unlike typical investors in the past, they are opening their wallets and bidding decisively.
Looking Forward
Some serious price adjustments are going to be made over the next few weeks as the property market continues to improve.
Buyer’s advocates and buyers will have to increase their purchase prices as the market gathers steam. Sellers will need to be cautious that they don’t lift their expectations on price as all properties and Melbourne suburbs are not performing in the same way.
This coming weekend will prove another test for the market – the REIV expects approximately 970 auctions to go ahead.
If clearance rates remain consistent this weekend and into October, we can call with confidence an upward swing in the Melbourne property cycle.
Top 5 Houses
1. 114 Hotham Street, East Melbourne $3,810,000
2. 20 Clifton Street, Richmond $2,880,000
3. 5 Tourello Avenue, Hawthorn East $2,530,000
4. 11 Esplanade Esplanade, Williamstown $2,390,000
5. 17 Hopetoun Street, Elsternwick $2,308,000
Top 5 Bargain Houses
1. 12 Dianella Court, Frankston $305,500
2. 9A Glendenning Court, Frankston $312,000
3. 414 Waterfall Gully Road, Rosebud $315,000
4. 2 Hilton Court, Frankston $318,000
5. 186 Melbourne Road, Rye $325,000
Top 5 Apartments
1. 11 Waterloo Place, Richmond $2,000,000
2. 5A Olinda Avenue, Beaumaris $1,600,000
3. 12/1 Domain Street, South Yarra $1,220,000
4. 94 Ashburn Grove, Ashburton $1,210,000
5. 2/2 Wimbledon Avenue, Elwood $1,175,000
Top 5 Bargain Apartments
1. 8/100 Claremont Avenue, Malvern $287,500
2. 35/149 Thames Promenade, Chelsea Heights $290,000
3. 2/7 Dartford Street, Flemington $290,000
4. 2/33 Milton Avenue, Clayton South $300,000
5. 12/111 Gillies Street, Fairfield $321,000
Source: REIV
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