Hi ,
The clearance rate jumped up back into the high 70%’s again with 535 auctions reported to the REIV. 317 sold at auction, 98 sold before auction, 1 sold after auction and 119 passed in. There were an additional 127 private sales. The same time last year there were 604 auctions reported resulting in a clearance rate of 71%.
The Andrews Government announced last week that a proposal to cap rental increases on investment properties was now completely off the table. Whilst it appears to be bad news for tenants, the reality is that such a proposal, on top of increased land tax, new compliance legislation, interest rate hikes and general cost of living… could have been the last straw for many investors. The proposal would have been counter productive and likely would have further lessened the supply due to more investors selling their investment properties. In the long term, this would have resulted in even higher rents. Daniel Andrews was quoted in saying ‘he is ruling out anything that would result in less housing’.
219 Page Street, Middle Park went under the hammer and had active bidding from two buyers. The two bedroom, one bathroom, single fronted period home had been structurally renovated and is located in one of the best streets in Middle Park. The property was quoted at $1,800,000 to $1,900,000 prior to auction and sold under the hammer for $2,050,000.
Have a great week!
Kim Easterbrook
Geelong Property Market Update
In recent weeks, Geelong, as did other areas of the State, received the bad news that the Commonwealth Games was not going to be held in Victoria. But some good news followed from the Federal Government that Hanwha Defence Australia had been awarded a contract to build 129 Redback infantry fighting vehicles at its Avalon facility north-east of Geelong in Victoria. A project expected to cost $5b to $7b and expected to create 600 direct jobs and many more indirect jobs.
In addition to this, Geelong was the successful tender for the new Convention and Exhibition Centre which will include the construction of a purpose-built convention and exhibition space. The precinct will also be home to retail and food offerings, a large public plaza and a 200-room Crown Plaza hotel.
Just more reasons to add to why the population of Geelong will likely to continue to grow strongly and add pressure on housing supply. There have been a low level of properties on the market to sell this year, as with most areas within the state, but interestingly over the past few weeks, that there appears to be an increase in stock on the market and an increase in buyers attending open for inspections. Whilst too early to read anything into this, it could represent is a start of an active and balanced Spring season and hopefully back to some kind of normal selling and buying conditions.
57 Laura Avenue, Belmont went to auction over the weekend which is an updated three bedroom, one bathroom home on 663 sqm attracted four active bidders but passed in for $746,000. It sold immediately afterwards for $752,000.
Vicky Whittaker – Geelong and Regional Victoria Office
Hi ,
The clearance rate dropped to 71% over the weekend with 555 auctions reported to the REIV. 395 properties sold with 319 being at auction, 76 before auction and 160 properties passed in. There were an additional 110 private sales. As a comparison, for the same time last year, the clearance rate was 69% on 503 auctions.
Whilst demand for property is still strong, there are varying price points where the demand is strongest and weakest. The sub $2m market is the strongest price point as a direct result of interest rate rises and increased cost of living. Banks assessment rates have increased dramatically over the past 12 months which has affected how much a buyer can borrow to purchase a property. Reports from selling agents are consistent across the board with the amount buyers with $4m plus budgets reducing and buyers with sub $2m increasing. That being said, there is still a constant demand for good quality family homes in the inner/middle ring of Melbourne.
The auction of 18 Belson Street, Malvern East is a good example this. The well located, four bedroom, four bathroom period home which has been well renovated throughout was quoted for $6,000,000 to $6,400,000 prior to auction. The auction had 3 active bidders and one could argue, had this gone to market say 12-14 months ago, there would have likely been more parties there to bid. The auction still produced a solid result selling for $6,605,000 with the property being announced on the market at $6,500,000.
A huge result in Pascoe Vale South with a three bedroom, one bathroom 1950’s home on 533 sqm of land selling under the hammer well above reserve. The property was quoted prior to auction for $1,250,000 to $1,350,000 with the bidding commencing at the bottom of the range. Three bidders participated in the auction pushing the price to $1,640,000 which was almost $300,000 over reserve.
David Easterbrook
Hi ,
Auction numbers are on the rise and last weekend there were 523 auctions being reported to the REIV. 302 sold at auction, 87 sold before auction, 1 sold after auction and 133 passed in producing a 75% clearance rate. There were an additional 124 private sales. Interestingly, a similar amount of auctions were held on the same weekend last year being 509 which resulted in a lower clearance rate of 68%.
Victorian landlords have been selling their investment properties at the highest rate in over five years. According to PropTrack, 29 per cent of sales across the state in June were landlords offloading their investment properties. Reports in the media have been circulating that this has been due to the latest increase in land tax which has further increased the cost of holding an investment property, along with the recent costs to ensure properties were compliant in accordance to the latest rental legislation. However, the feedback we are receiving from our landlords is that they are selling to access their equity to pay off their owner occupied debts due to rising increase in interest rates. Cost of living pressures have been the real reason why we are seeing this rise.
If the levels were this in July, than the levels we are going to be seeing over the next few months leading into Christmas could be even higher, based on the enquiry from our own client base we are receiving. This could be disastrous in the long term for tenants who are already struggling to find rental properties with vacancy rates at very low levels. The Victorian Government are making noises about implementing rental caps which will allow landlords to lift rent only once every 2 years and potentially imposing caps on any rental increase. This will only make the rental crisis worse and we could see critical shortage of housing for renters in the years to come.
Demand from buyers for properties sub $2m is increasing as interest rates rise, buyers budgets have generally decreased and therefore their expectations need to come into align with what they can get for their budgets. 15 Gnarwyn Road, Carnegie is a four bedroom, three bathroom home with a double garage, updated internally but floorplan has only been partly structurally renovated. The property is on 500 sqm and well located but it does have a shared driveway and units at the rear. The property was quoted $1,350,000 to $1,485,000 prior to auction and the auction started on a vendor’s bid of $1,250,000. Four bidders pushed the price to $1,580,000 where the property sold which we believe is $130,000 over the reserve price.
Have a great week.
David Easterbrook
Hi,
Auction numbers still remain low with 397 auctions being reported to the REIV resulting in a clearance rate of 78%. 226 properties sold at auction, 85 before auction and 86 passed in. In comparison, there were 511 auctions reported for the same time last year resulting in a clearance rate of 67%. There were a further 122 properties that sold via private sale and off market campaigns.
The REIV released their June quarter 2023 Median Prices over the weekend with metropolitan houses dropping 1.1% to $937,500 and metropolitan units climbing 3.2% to $630,500. Regional Victoria had a house price rise of 0.6% statewide to $604,500 and unit medians declined 2.6% to $411,500.
Interestingly, according to the REIV metropolitan units in the middle ring of Melbourne had the strongest growth with Mount Waverley climbing 25% to $1,245,000, Hampton units rising 20.1% to $1,105,000 and Brighton East climbing 14.9%. Whilst some of this data can be skewed by the sale of higher price point properties, I do believe there is something in this data that shows that buyers may be looking at smaller properties and cheaper price points due to rising interest rates. This could be a result of the bank not allowing buyers to borrow as much money or buyers just being cautious and not wanting to put themselves at risk of mortgage stress.
4/85-87 Miller Street, Carnegie went to auction on the weekend which was quoted at $740,000 to $770,000 prior to auction. Three bidders participated in the auction and the property was announced ‘on the market’ at $750,000. The property sold under the hammer to a young couple for $779,000.
For many months now, houses in Cheltenham generally speaking have been selling for strong prices. 27 Renowden Street, Cheltenham was quoted $1,250,000 – $1,350,000 prior to auction and is a large but dated, 5 bedroom, 3 bathroom, 2 car garage home located very close to the Moorabbin Airport. Four bidders competed for the home which sold for $130,500 over reserve for $1,480,500.
Have a great week.
David Easterbrook
Hi ,
Auction numbers were down again this week with 385 auctions being reported to the REIV resulting in a clearance rate of 76%. 209 properties sold at auction, 82 before auction and 94 passed in. In comparison, there were 481 auctions reported for the same time last year resulting in a clearance rate of 67%. There were a further 141 properties that sold via private sale and off market campaigns.
Investors may soon be in for some long awaited good news with signs that the vacant property market is tightening even further. Whilst this is positive for Investors, this unfortunately is not great news for Renters. CoreLogic’s latest data shows that the median rent for Melbourne increased by 3.9% in the June 2023 quarter and the current vacancy rate is sitting at 0.8%.
Rental demand is rising due to increased overseas migration, unaffordability to buy into the property market and a decrease in supply due to some Investors selling their investment properties (mostly due to higher running costs resulting from higher interest rates, increased land tax and new compliance legislation). Large numbers of prospective tenants are being reported at weekend open for inspections. We have also seen this within our company and winter seems to not be deterring people like it has in the past.
Investors who ride out the next 12 months may very well reap the rewards with not only rents likely to keep on rising, but if interest rates start declining next year as predicted, property prices could continue to rise which will in turn could result in some good capital growth levels for some Investors.
A strong result was recorded in the western suburbs with 11 Myrtle Drive, Maidstone going under the hammer. The four bedroom, four bathroom, double garage modern home attracted strong interest from local home buyers with the property quoted at $1,650,000 to $1,750,000 prior to auction. The property sold under the hammer for $1,807,500 which was $57,500 more than its reserve.
Have a great week.
David Easterbrook
Hi,
There were lower auction numbers over the weekend as a result of school holidays and also being in the middle of winter. 383 auctions were reported to the REIV resulting in a clearance rate of 73%, which is the lowest level it has been for quite some time. As a comparison, there were 524 auctions for the same time last year resulting in a clearance rate of 63%. In addition, there were 278 private sales which is actually a reasonably strong weekly number. This could be due to the increase in off market activity which is quite normal to occur over the winter period.
According to CoreLogic, house values across the country rose for the fourth consecutive month in June but growth seems to be slowing down. Home values have risen 2.8% over the quarter to end of June. The drop in the clearance rate may demonstrate the market sentiment is falling again (we may need a few more weeks of data to understand if that is really happening) which may open a small window over the colder months for buyers who have been battling low stock numbers and strong competition on some properties.
All eyes with be on the RBA tomorrow watching to see if interest rates will be lifted once again. Opinion is divided as to whether this will happen or not but it if it doesn’t happen in July, it seems likely to happen in August. Either way, it is likely we will see interest rates rise even further over the next few months.
The auction of 1/1 Mahvo Street, Bentleigh was a very competitive auction. The property is a three bedroom, two bathroom unit very well located close to Centre Rd. Whilst only 3 active bidders, it appeared there were many others there that didn’t get a chance to put their hand up. The property was quoted $1,100,000 – $1,200,000 prior to auction, announced on the market at $1,240,000 and sold for $1,415,000.
With interest rates rising, buyers are looking further at compromises to get into the property market. This isn’t just moving further out from the city, but looking at smaller properties (being villa units/townhouses on subdivided blocks and perhaps even apartments).
1/30 Shelley Street, Elwood is a two bedroom, one bathroom apartment with a courtyard. The property was quoted $550,000 to $600,000 prior to auction with four bidders participating and the property selling $30,000 above reserve for $630,000.
Have a great week.
David Easterbrook
Hi,
There were 504 auctions reported over the weekend resulting in a clearance rate of 76%. 288 properties sold at auction, 93 before auction and 123 passed in. There were an additional 206 private sales. In comparison, the same time last year there were 790 auctions producing a clearance rate of 69%.
Renters may be facing further pressure on rental prices with a rise in investors considering selling their investment properties. The Andrews Government over the past few years have made it harder for Rental Provider’s (Landlords) by introducing new compliance legislation in which RP’s must have their properties complying with multiple guidelines in order to legally lease out their properties. This has resulted in increased costs of holding an investment property. In addition to this, the Andrew’s Government have introduced increased land taxes for investors and now there is the further pressure with interest rates predicted to rise further.
Over the past month we have seen an increase in Rental Provider’s wanting to sell their investment properties in order to pay down their owner occupier debt and reduce costs. This could result in an increase in properties on the market which will be welcomed by Buyers and the increase in rents due to less stock available will be welcomed by Investors. This could prove disastrous for Renters with vacancy rates already extremely low across the state.
Updated family homes are still proving to be highly popular with an updated three bedroom, two bathroom home in Cheltenham achieving strong competition at auction on the weekend. 50 Eversham Road, Cheltenham had a reserve of $1,300,000 prior to auction and the auction started strongly with the opening bid at that level. Six bidders still participated above this with the property achieving a final result of $1,505,000.
Have a great week.
David Easterbrook
Hi,
The clearance rate slightly dipped over the weekend with 471 auctions reported to the REIV. 288 sold at auction, 78 before auction and 105 passed in. In addition there were 156 private sales. In comparison, there were 733 auctions reported to the REIV last year resulting in a clearance rate of 72%.
The RBA unexpectedly raised interest rates last week not only due to high inflation of 7% but also due to the unemployment rate of 3.5% which is a near 50 year low, increasing wages and also rebounding house prices. Rising interest rates last year resulted in a stop start property market sentiment and the feeling is that this interest rate rise has paused some buyers again but likely for only a short period.
The feedback from our team meeting this morning is that all buyer agents saw strong buyer numbers through the open for inspections they attended and active bidding at auctions. So whilst there are some they may have decided to sit on their hands again, there is still strong interest in property and this short term lull may present some opportunities for buyers. I do strongly believe stabilisation of interest rates is in sight and whilst the property market is currently stable, property prices may increase again by the end of the year.
246 Clarke Street, Northcote was quoted at $1.2m to $1.3m prior to auction and passed in with active bidding. The small, three bedroom, one bathroom home on a subdivided block went to auction with participation from two bidders. The property passed in and sold for $1.225m which was below the $1.25m reserve.
Six bidders participated in the auction of a near new four bedroom townhouse in Bentleigh with a crowd of 200 people watching on. The bidding started at $2,100,000 and sold for $2,430,000. The property has some wow factor with a high quality fit-out and a swimming pool but it is located close to the train line.
A renovated property in Highton, Geelong was under strong competition with buyers. 99 Belle Vue Ave, Highton is a four bedroom, one bathroom home and was quoted at $680,000 to $720,000 prior to auction. Five bidders participated in the auction and the property sold for a huge $831,000 which was $111,000 over reserve.
Have a great week.
David Easterbrook
Hi,
534 auctions were reported to the REIV resulting in a solid clearance rate of 80%. In comparison, there were 1,007 auctions on the same weekend last year producing a clearance rate of 73%. 351 properties sold at auction, 78 properties sold before auction and 105 passed in. In addition, there were 156 private sales.
The difference in auctions held from this year vs last year does demonstrate the lack of properties on the market with some vendors opting not to sell until they see the property market conditions improving. This time may have come with CoreLogic releasing data overnight demonstrating that Australia’s housing downturn is over. We still believe the bottom was December last year however data always takes time to show evidence of this.
CoreLogic’s national Home Value Index rose again for the second month in a row. Sydney property prices increased 1.3% in April and is leading the charge. It is not unusual for Sydney’s property market to be the first market to show signs of an upturn or downturn then other capital cities usually follow suit. Melbourne’s property prices only rose 0.1% but the data is suggesting the market is now stable. Regional property prices in Regional Victoria have fallen 0.4% for the month again suggesting the market is stable.
What does this mean? With interest rate rises seemingly to have somewhat stabilised (or close to reaching its peak) and strong migration predicted over the next 2 years, we may start to see property prices creep up again in the not to distant future. Unfortunately, many buyers will wait to see some confidence in the property prices before deciding it is time to buy. But timing the market is a dangerous strategy as history shows that property prices can increase at rapid rates and the data lags behind which means buyers generally end up paying more than what they would have only a few months earlier.
8 Hillside Avenue, Bentleigh went to auction on the weekend. This updated and well located, four bedroom, three bathroom family home was popular with buyers. The property was quoted at $2,000,000 to $2,200,000 prior to auction. The auction bidding started on a $2,000,000 bid and 2 bidders went head to head with some other buyers not getting a chance to put their hand up. The property sold for $2,325,000 under the hammer.
72 Spensley Street, Clifton Hill sold well over reserve with the renovated three bedroom house selling for $2,080,000 with six bidders participating at the auction. The renovated, 3 bedroom, 1 bathroom, 1 carpark home was quoted for $1,680,000 to $1,780,000 prior to auction.
Have a great week.
David Easterbrook
Hi,
807 auctions were reported to the REIV over the weekend. 478 sold at auction, 143 sold prior to auction and 186 passed in resulting in a clearance rate of 77%. There were an additional 178 private sales. In comparison, there were 1,241 auctions held on the same weekend last year producing a 76% clearance rate.
Our suggestions that the property market bottomed at the very end of 2022 is now being supported by the latest CoreLogic data released last week. The data suggests that property prices actually increased in March 2023 which was the first time there has been an increase in property prices in 10 months. Sydney’s property prices increased 1.4% in March resulting in an increase of 0.4% for the quarter. Melbourne’s property prices rose 0.6% in March to reduce the quarter reduction to -0.9%. Melbourne often follows Sydney’s trend so the April to June quarter will be very interesting especially with the clearance rate consistently reaching a solid mid to high 70%’s.
Good news for investors (not so good news for renters however) showing that rents are still rising with Melbourne, Sydney, Brisbane, Adelaide and Perth all under going rental shortages in both the housing and unit markets. The National Housing Finance and Investment Corporation (NHFIC) has estimated that 190,000 more households will form between 2023 and 2033 and that by 2027, there will be a deficit of 106,300 dwellings. In short, we will not be building enough houses to cover the demand (which could worsen if the rate of builders going out of business continues).
With immigration numbers rising and confidence building that we are infact close to the peak of the interest rates rising, we may in fact see a busy winter period rather than the slump winter usually brings.
A house in Elwood that was in disrepair went to auction on the weekend in a market where houses that need renovating are generally speaking not performing. 35 Rothesay St, Elwood was quoted $930,000 to $1,020,000 prior to auction and is a two bedroom, one bathroom, single fronted period home which is in such bad condition, it was not liveable. Four bidders participated in the auction and the property was announced on the market at $970,000 and sold for $1,130,000.
In Canterbury, another unrenovated property went to auction on Saturday and was heavily contested. 5 View Street, Canterbury is a five bedroom, two bathroom, unrenovated period home on 852sqm of land (no heritage overlay). The property was quoted at $3,600,000 to $3,900,000 prior to auction and the property sold for $5,100,000. It is an understood an international student was bidding on behalf of his parents who are looking to move to Melbourne in the future.
Have a great week.
David Easterbrook
