Hi ,
The auction clearance rate dropped to 75% last weekend on 518 reported REIV auctions. Of the 518 auctions, 289 sold at auction, 100 before auction and 129 passed in. The same weekend last year produced a clearance rate of 79% on 598 auctions. In addition, there were 161 private sales.
The higher end of the market continues to perform well with 11 properties last month selling for over $10,000,000. Whilst the middle tier of properties seemingly have less buyers due to higher interest rates, the $10,000,000 plus market is coming through unscathed due to the amount of buyers not needing a loan to purchase.
On the flip side of this, the lower end of the property market is also generally competitive due to more buyers lowering their budgets to take into consideration the higher interest rates and this is where largely a lot of the mortgage holders are.
The REIV released their March quarterly data this morning showing that median house price in Melbourne actually rose 2% for the quarter with houses in Regional Victoria decreasing by 1.5%. It is the locations where most of the holiday homes are located seem to be leading the charge in declining property prices… eg Mornington Peninsula, Torquay and so on. A few reasons are contributing to this, one being the demand has reduced significantly post-covid period, rising interest rates is making it harder for people to hold onto a second ‘lifestyle’ property, and also land tax is a contributing factor.
Slowly but surely buyers seem to be have a stronger interest in unrenovated properties. Build costs have stabilised and competition on renovated properties has been high. 92 Ireland Street, West Melbourne was quoted at $1,000,000 to $1,100,000 prior to auction with strong bidding pushing the price to $1,231,000 which was $81,000 over the reserve.
The highest sale for the week was 46 Heyington Place, Toorak (5 bedroom renovated home on 1,018 sqm of land) selling for $17,500,000 off market.
Have a great week!
Kim Easterbrook
Geelong Property Market Update from Vicky Whittaker
According to the Heron Todd White property clock, Geelong has officially hit the bottom of the property market; meaning Geelong is currently at the lowest price point and an upward swing in prices is predicted.
Geelong currently has 30% more stock on the market compared to this time last year. This is giving a greater selection of properties for investors and owner occupiers which results in more room to negotiate, helping eliminate the emotional or impromptu purchase.
Geelong attracts investors and homeowners alike, with families aspiring to take advantage of prestigious schooling opportunities plus an enormous selection of housing configuration for lifestyle living and everything in between. Geelong offers great diversity being on the doorstep of Torquay and the Great Ocean Road, plus easy access to metro, the Bellarine and country Victoria. There is an abundance of job opportunities, with Work Safe offices, NDIS, Cotton On, Barwon Health and TAC being among the largest employers in the Geelong Region.
There is plenty of planned infrastructure in Geelong with the Geelong Ring Road expansion, Geelong Convention centre, housing and commercial developments in central and outer suburbs plus schooling, kinder and child care services. Partner this with an easy 50 minute commute to Melbourne CBD’s bustling social, culinary and professional possibilities.
With many investors selling up, rents should continue to rise as vacancy rates drop to the lowest levels in history. With increase in supply and rising rents, this might be as good as time as ever to get into the Geelong property market.
Vicky Whittaker – Senior Buyer’s Agent (Regional Victoria)
Hi ,
Melbourne property auction numbers are lower due to the school holidays with 436 auctions being reported to the REIV on the weekend. 231 sold at auction, 103 before auction and 102 passed in resulting in a clearance rate of 77%. In addition, there were 306 private sales.
CoreLogic released their March quarter property price data and it shows that Australian property prices have increased for the fifth consecutive month to bring the median house price to $772,730. Across the quarter, Perth prices increased by the highest rate of 5.6%, followed by Adelaide at 3.3%, Brisbane at 3% and then Sydney by 0.9%. Melbourne was the only capital city that saw a marginal dip of -0.2% for the quarter.
This would appear surprising due to the cost of living pressures and rising interest rates, but our population is growing at a rate not seen since the 1950’s and building approvals are down.
That being said, there has been a real shift in what purchasers are buying and the lower end of the housing market is the segment that is performing the strongest. Buyers cannot access the amount of money from the banks they previously were able to and this has resulted in purchasers looking for smaller properties, unrenovated homes and also opting to move further out.
In Melbourne’s West, 44 Soudan Road, West Footscray went under the hammer. West Footscray has long been an area sought after by investors and young families. The renovated, three bedroom, two bathroom home on 464 sqm was quoted for $1,200,000 to $1,250,000 prior to auction. Strong bidding pushed the price to $1,357,000 after being announced on the market at $1,310,000.
On the other side of town, 8 Farm Road, Cheltenham is a large, renovated family home located on a secondary main road. The property was quoted at $1,500,000 to $1,600,000 prior to auction and three buyers participated. The property was announced on the market at $1,600,000 and sold to a bidder on their first bid of $1,601,000.
The most expensive property that sold at auction on the weekend was a large modern house in the Glen Waverley Secondary School zone selling for $3,780,000.
Have a great week!
Kim Easterbrook
Hi,
The auction clearance rate dropped slightly to 74% on the weekend as a result of a huge Super Saturday. There were 1,106 auctions reported to the REIV with 605 selling at auction, 215 sold before auction, 1 sold after auction and their were an additional 153 private sales. In comparison, there were 970 auctions last week resulting in a 78% clearance rate and 974 auctions on the same weekend last year also resulting in a 78% clearance rate.
The number of properties on the market are at high levels for this time of year with one of the contributing factors being landlords wanting out of owning investment properties in Victoria. Some landlords are selling in order to cash in and pay their owner occupier debt, but others are selling due to the increase in holding costs and one of those factors being land tax.
8,739 properties were listed of for sale in January and February compared to 5,811 last year with less than a third of these being snapped up by investors. With vacancy rates already sitting below 1%, this could prove to be disastrous for renters who may be forced to either live in smaller properties or move further out (even to regional centres). On the flip side of this, it may prove good news for landlords who are entering the market, or holding on to their investment properties as rents should continue to rise.
Whilst it doesn’t seem that the State Government has a reform of land tax on their agenda, a discussion around a reform of stamp duty has surfaced. This would involve abolishing stamp duty in favour of an annual tax which will assist home buyers to enter the market sooner. Currently, stamp duty is approximately 5.5% to 6% of the purchase price which needs to be paid outright, on top of the deposit when the property is purchased. This delays some buyers from purchasing due to the time it takes to save for the stamp duty and in some cases, actually discourages a buyer from purchasing at all.
First home buyers were out in force trying to secure an apartment at 2/9 Fordholm Road, Hawthorn. The two bedroom, one bathroom, one car mostly original apartment was quoted prior to auction for $570,000 – $600,000 with the quote range lifting to $600,000 to $635,000 during the campaign. The property attracted five bidders at auction with the property selling for $735,000 on a $630,000 reserve. The property was on the market last year for $715,000 and didn’t sell.
The most expensive sale for last week was a six bedroom, four bathroom, six car period home on 1,940 sqm of land. 16 Rothwell Street, Ascot Vale sold for $7,250,000.
Have a great week!
Kim Easterbrook
Hi ,
The auction clearance rate produced a solid 78% on the weekend on a reported (to the REIV) 885 auctions. 508 properties sold at auction, 179 sold before auction, 3 after auction and 195 properties passed in. In addition, there was a very high number of private sales, 436 in total. In comparison, a similar amount of properties went to auction on the same weekend last year resulting in a clearance rate of 73%.
The weekend’s auction clearance rate was a little higher than expected with Melbourne’s property market still feeling somewhat patchy. Buyers are still a little spoilt with choice and some vendor’s are having to adjust expectations to sell their property. That being said, 508 properties selling at auction and 436 private sales are very strong numbers and demonstrates we are in a very active market.
Feedback from some selling agents is that there are still many buyers who have just started their search and are in the ‘research’ phase and others who are attending auctions but will not bid as they do not feel confident in buying without a ‘subject to finance’ clause. Some potential buyers are attending auctions in the hope the property passes in and then hoping to put themselves into a position where they can negotiate that clause. Buyers who attend auctions who are willing to buy ‘unconditionally’ are in a much stronger buying position.
The rental market is still proving very difficult for tenants. SQM Research released vacancy rate data for February showing that Melbourne’s vacancy rate has further decreased to 1.0% from 1.1% in January and 1.1% for February 2023. To achieve a balanced rental market, vacancy rates should be sitting around 2% to 3% so we are quite a way away from that. Rents increased by an overall average of 1.5% in February and have increased an average of 12.6% (for both houses and units) for the previous 12 months.
The auction of 106 Lennox Street, Richmond attracted four bidders but only sold slightly above the reserve price. The two bedroom, one bathroom requires work but the floorplan has been structurally updated in the past. The property was quoted for $900,000 to $990,000 prior to auction and sold for $1,005,000 under the hammer.
The most expensive sale for last week was a five bedroom home in Mount Eliza. 56 Glen Shian Lane is a five bedroom, four bathroom, modern home with a four car garage set on over an acre of land boasting expansive views of Port Philip Bay. The property sold for $7,528,000.
Have a great week!
Kim Easterbrook
Hi ,
The auction clearance rate is remaining consistent with 746 auctions reported to the REIV. 472 properties sold at auction, 91 sold before auction and 183 passed in resulting in a clearance rate of 75%. In addition to this there were 161 private sales. The final clearance rate for last weekend was 78% on a huge 1,159 auctions. The same time last year, the clearance rate of 77% on 757 auctions.
The clearance rate in the mid 70’s suggests we are in a balanced market, however it does feel a little different to that on the ground. Stock levels are high, and new listings are continuing to be loaded online to levels that have not been seen for quite some time. Whilst many vendors may not disclose the real reason for selling, but this partly could be to do with the increase in interest rates and unaffordability. This also could be partly due to some vendors not wanting to hold off anymore and there is certainly a sentiment of ‘let’s just get on with it’ out there.
Whilst some auctions are competitive, some are not, many are passing in and selling immediately afterwards. More times than not there are only one or two buyers circling a property and therefore a vendor will be more open to selling before auction. Some ‘expressions of interest’ campaigns are also not selling at the deadline and are being extended out with price adjustments. We are also seeing many properties sell ‘subject to finance’ and this is due to a lot of the current property buyers are new to the market and are still waiting on their finance approval.
So whilst the auction clearance rate looks like we are in a balanced market on paper, the feeling on the ground is that we are more in a buyers market than a sellers market (generally speaking). My feeling around this though is it could be short lived. There are a lot of buyers out there actively looking. But they currently have a lot of choice and not a lot of urgency to buy. If stock levels tighten again (which they are likely to do at some time in the future), then the market could easily shift from a buyers market to a sellers market.
The villa unit market continues to be strong due to its more affordable price point in the market. 8/2 Lisson Grove, Hawthorn is a well located but small (and dated) two bedroom villa unit and was quoted $700,000 to $750,000 before auction. Three bidders tried to secure the property with the property selling $85,000 over reserve for $835,000.
9 Bendigo Avenue, Elwood sold before the expiry of its ‘expressions of interest’ campaign. The sale smashed records for the suburb with the five bedroom, five bathroom, 8 car basement home selling for $17,050,000 far exceeding the previous house record of $10,000,000 set in 2022.
Have a great week!
Kim Easterbrook
Hi,
The Melbourne property market had a big test on the weekend with 870 auctions reported to the REIV. 480 properties sold at auction, 176 sold before auction and 214 passed in resulting in a clearance rate of 75%. In addition, there were 146 private sales.
The increase in properties on the market has allowed buyers a lot more choice than they have had in previous years. As a result, it appears that many buyers are taking their time in purchasing and the FOMO (fear of missing out) we have seen in previous years has disappeared. Generally speaking, buyers are still quite cautious about committing to purchasing although the motivation to buy is now stronger than it has been for the past twelve months.
As a result, we are seeing many properties selling quickly and prior to the expiry of their EOI campaign or before auction. This is because many properties are only attracting one or two strong buyers. There are of course exceptions to this and some well located family homes are still attracting multiple bidding at auction.
Property prices are holding up even though there is generally less competition on each property. In many cases there are still one or two buyers willing to pay the current market value for the property which is resulting in less opportunistic buyers than what there was in the last quarter of last year.
A renovated, family home in Williamstown went to auction in front of a large crowd. The five bedroom, two bathroom period home was quoted at $2,200,000 to $2,400,000 prior to auction with five bidders participating. The property sold for $2,577,000 under the hammer.
A three bedroom, two bathroom villa unit in Moorabbin was in strong demand and the auction had participation from five bidders. 2/16 William Street, Moorabbin was quoted at $780,000 to $850,000 prior to auction and the opening bid of $900,000 put the property on the market. The property sold for $1,085,000.
Have a great week!
Kim Easterbrook
Hi,
Auctions in Melbourne have commenced for 2024 with clearance rates hovering in the high 70%’s to 80% which are the highest clearance rates that have been seen in quite some time. Last weekend, there were 675 auctions reported to the REIV with 395 selling at auction, 140 selling before auction and there were an additional 110 private sales. There has been an increase in properties selling prior to auction with many vendors willing to sell if they receive a reasonable price rather than holding out to auction.
Talk of interest rates nearing to the peak and even declining later in 2024 is giving buyers confidence to purchase. Over the Christmas break, we experienced extremely high level of enquiries from new buyers wanting to enter the real estate market (all different market segments, investors, first home buyers, upsizers and downsizers). There have been so many reasons for buyers not to buy over the past four years, mostly being due to market uncertainties as a result of Covid and then rising interest rates. But now it appears we nudging closer to inflation becoming under control and we are well and truly past the Covid lockdown days. So 2024 is feeling like a good year for many buyers to finally make the move to either buyer a new owner occupied property or buy an investment property.
Whilst there has been a number of investors sell their investment properties over the past six months (due to rising interest rates and holding costs) there seems to be a number of new investors wanting to enter the market. Lending to property investors has reached a six-year high with the ABS reporting that in December, 36 per cent of all housing finance went to investors. Rising rents and low vacancy rates, in addition to ongoing housing supply issues are making it appealing for investors to enter the market. This new wave of investors will likely be price sensitive though, as the increased interest rates will likely cap budgets for many in addition to investors wanting to minimise impact to their cashflow.
2024 is looking like an exciting and positive year for the property market. Stock levels have been healthy so far this month and the word from many selling agents is that this should continue. On the flip side of this, buyers have a lot more confidence to purchase as the market sentiment improves. So at this stage, it looks like there will be lots of transactions this year with good levels of stock to buy and the buyers in the market to purchase these properties.
Hi ,
There were 740 auctions reported to the REIV over the weekend resulting in a clearance rate of 73%. 413 properties sold at auction, 124 before auction, 1 sold after auction and there were an additional 236 private sales. The same weekend last year there were 942 auctions resulting in a clearance rate of 68%.
CoreLogic released their national monthly Home Value Index last week which showed nationally, property prices has risen 0.6% which is the smallest monthly gain since February 2023 with Melbourne being down 0.1%. This brings the quarterly growth to 0.6% across Melbourne which supports a balanced and stable market. CoreLogic Research Director Tim Lawless makes a good point in regards to how historical property cycles might change in the future. The higher end of the market usually leads the charge in a property cycle but with interest rates rising, and borrowing capacities reducing, it may actually be the middle ring of the market which is the one to watch when looking at property cycles. This segment is where the strongest rate of growth is currently sitting.
The good news is that it is looking more unlikely that the RBA will increase interest rates tomorrow with the new inflation rates being below 5% for the first time in 20 months. This still doesn’t mean there won’t be another rate rise early next year however for the time being, this news can give buyers some kind of confidence that we might be getting close to the peak.
2023 has been a very interesting year for the Melbourne property market, property prices still increased whilst interest rates were rising at an unexpected rate. There have no doubt been some casualties who have had to sell their properties due to unaffordability. But it also shows the resilience the property market has and population growth is strongly contributing to the strong demand.
This is the final property market wrap for the year. Myself and the team wish you all a very Happy and Safe Holiday season and looking forward to updating you all on the property market in 2024.
Have a great week.
Kim Easterbrook
Gold Coast Property Market Update
The Gold Coast property market is a very different market to Victoria and in fact, any other state in the country. Melbourne is the auction capital of the country where in comparison, the amount of properties that go to auction in Queensland is far less.
The reason for this is in Queensland, by law, an estate agent is not allowed to quote any price for the property if it is going to auction. This leaves buyers scratching their heads and unsure as to how much they should pay or if the property is likely to be any where near their budget. This is particularly hard for buyers from interstate and overseas. The auctions are not fast and furious as they are in Melbourne & Sydney, often taking well over half an hour up to an hour as the auctioneer often pauses the auction to privately negotiate with a buyer. If he receives a higher bid from a buyer, he will reopen the bidding.
Most agents prefer to conduct private sales but don’t put a price on the advertisement which also leaves the buyer frustrated as to what they should pay. Another point to remember is that there is not an “and/or nominee” option in Queensland, it is imperative that all buyers details are correct at the time of signing the contract as they cannot be changed once the contract is signed by all parties.
A very different market to Victoria and just reiterates why it is important to get professional help when trying to buy a property.
Jenni Wright – Senior Buyer’s Agent (Gold Coast)
Geelong Property Market Update
The activity in the Geelong property market has picked up and there has been an increase in available stock over the last few weeks as some vendors are keen to sell before Christmas. Good quality properties that require minimal work have attracted multiple interested parties during negotiations from both first home buyers and investors.
Geelong has been recognised as one of the nation’s top future property hotspots. This is attributed to factors such as strong population growth, economic diversification, and the success of the Armstrong Creek urban growth corridor as a job creator. There have also been significant investments in the region, including defence manufacturing contracts, local infrastructure improvements, and the construction of a $294 million Geelong Convention Centre. These factors contribute to the desirability of buying property in Geelong.
The national valuation firm Herron Todd White has indicated they believe Geelong as reaching the bottom of the market on its national property clock, indicating a potentially favourable time for property buyers in the region.
Vicky Whittaker – Senior Buyer’s Agent (Geelong and Regional Victoria)
Hi ,
The second biggest auction weekend this year resulted in a surprisingly stronger clearance rate than I was expecting. 73% of properties that went to auction sold. There were 820 auctions reported to the REIV in which 436 sold at auction, 159 sold before auction, 224 passed in and 1 sold after auction. In addition there were 153 private sales. As a comparison, the time last year there were 809 auctions resulting in a clearance rate of 64%.
The last interest rate rise seems to have had little impact on the property market albeit buyers are certainly more cautious and factoring in potentially more interest rate rises. As with any previous interest rate rise, there is an element of shock and negativity surrounding the property market for a week or two and then a small recovery as buyers get their head around the new interest rate. This last rate rise seems to be no different.
Many selling agents have been reporting lower numbers through open for inspections and less bidders at auctions and the market was beginning to feel very similar to the decline we saw leading into Christmas last year. However, the results from the weekend show the clearance rate is significantly better than the same time last year.
There is no doubt the property market is patchy and some vendor’s are having to lower their expectations in order get their property sold. There is a big difference between the level of competition on renovated family homes and anything that is compromised (poor floor plan, not renovated, not so great location, etc).
A renovated home in Ivanhoe went to auction on the weekend and attracted strong interest from buyers. 14 Della Torre Cres, Ivanhoe was originally quoted for $2,900,000 to $2,950,000 and was lifted during the campaign to $2,950,000 to $3,050,000. The renovated four bedroom, three bathroom home with a double garage sold for a huge $3,621,000 making it the second most expensive home to sell in Ivanhoe for 2023.
Whilst in the south east, an unrenovated three bedroom, two bathroom townhouse in one of Toorak’s best streets passed in at auction. 70 Albany Road, Toorak failed to sell under the hammer but sold immediately afterwards for an undisclosed sum which we believe was below $2,000,000.
The next few weeks should bring some good opportunities for buyers as it does during most Christmas periods. Both vendors and selling agents are generally motivated to sell before Christmas and we also expect off market activity to rise now that most auction campaigns for 2023 have launched.
Have a great week.
Kim Easterbrook
Hi ,
Melbourne’s auction clearance rate remained steady at 71% even after the RBA’s announcement of another interest rate hike. 724 auctions were reported to the REIV with 377 selling at auction, 150 before auction and 207 passing in. Interestingly, there were only 99 private sales recorded which is low for this time of year where off market activity is usually higher. In comparison, there were 802 auctions on the same weekend last year resulting in a clearance rate of 69%.
This week’s interest rate rise was another blow to mortgage holders however it should have come as no surprise. It was likely that we were going to see another before the end of 2023. What we weren’t expecting was that it is likely there may be another interest rate rise in December or February next year.
At this stage, the rate rise has had little effect on the auction clearance rate which has remained steady in low 70’s for a number of weeks. This reflects a balanced market. With rents rising, it is becoming more important that people have a roof over their head that they own and as a result, buyers are still transacting.
What might happen as a result is a drop in stock levels as some vendor’s are becoming increasingly cautious about selling their property in a market with rising interest rates. I have heard numerous reports of vendors who were thinking about launching their properties this week, now holding off until February. On the flip side of this though, we might see another flurry of investors selling their properties to cash in their equity and pay debt their owner occupied debt. This will as a result put further pressure on rental prices.
Population growth and demand though is holding prices high and I believe will continue to do so. Whilst we have high levels of immigration, it is highly unlikely we will see any sort of housing crash due to rising interest rates.
A couple of auction results from the weekend, one being 20 Fairy Street, Ivanhoe. A property that sold well above reserve but one that was special and rare due to its location. The property was located in one of the best streets in the area and in a very tightly held pocket. The four bedrooms, two bathroom property was quoted at $2,800,000 – $2,900,000 prior to auction. A large attendance at the auction with a number of bidders not putting up their hand. Three bidders drove the price to $3,470,000 which sold approximately $500,000 above reserve.
A three bedroom townhouse in Port Melbourne was in demand with the well presented, three bedroom, two bathroom, one carport property attracting three bidders at its auction. The property sold for $1,605,000 which was $105,000 above its reserve.
Have a great week!
Kim Easterbrook
Gold Coast Property Market Update
There is still plenty of activity at open for inspections for both houses and apartments on the Gold Coast. Unlike the southern states, the demand for apartments is high as there are many buyers looking to have an escape from the colder winters down south thus purchasing an apartment to enjoy the mild winters offered on the Gold Coast. Broadbeach to Burleigh Heads proving to be popular destinations.
Northern Gold Coast suburbs like Helensvale, Coomera, Pimpama, and Ormeau are expected to be the most sought-after in 2024 for houses. With a median house price of $1.08 million in Helensvale and an array of local amenities, such as Westfield Shopping Centre and excellent transportation links, these suburbs offer promising investment potential.
According to CoreLogic, Brisbane and Gold Coast property prices have had strong growth increasing by 3.8% for the September quarter.
The Gold Coast property market, which is closely intertwined with the local employment market, has had and will continue to have a significant impact on the Gold Coast housing supply. The growth of key industries such as tourism, hospitality, health care, construction, and the film industry has created numerous job opportunities, which in turn has driven demand for housing and influenced property prices.
Jenni Wright – Senior Buyer’s Agent (Gold Coast)
