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

Hi,

742 auctions were reported to the REIV on the weekend.  433 sold at auction, 142 sold prior to auction and 165 passed in resulting in an improved clearance rate of 78%.  There were an additional 149 private sales.  In comparison, there were 1,329 auctions held on the same weekend last year producing an 81% clearance rate.

With the clearance rate consistently improving, the media are now reporting more positive stories about the property market than their normal doom and gloom reports.  This in turn seems to helping some buyers to make the decision to purchase now.  It is still too early to call whether the property market has bottomed out however we do believe there more buying opportunities at the end of last year and each negotiation we are involved with now is met with more competition from other buyers.

Selling agents are reporting healthy numbers through many open for inspections but whilst the clearance rate is looking stronger, there are still buyers sitting on their hands with a wait and see approach.  Rising rents are pushing first home buyers into the market and as mentioned last market wrap, some people migrating from overseas are opting to buy rather than rent.

A huge auction in Geelong over the weekend with 19 Layton Crescent, Newtown going under the hammer.  A family relocating from Melbourne outbid four other bidders to secure the four bedroom, two bathroom, three car garage home on 973 sqm.  It is interesting to note that the property is in need of renovation.  The price quoted prior to auction was $1,690,000 to $1,790,000, the property was announced on the market at $1,800,000 and sold for a huge $2,535,000.

26 Westbank Terrace, Richmond was also hotly contested at auction which was brought forward due to an acceptable offer being placed on the property.  The updated four bedroom, two bathroom, two carpark home was quoted at $1,400,000 to $1,500,000 prior to auction and had active bidding from four parties (more buyers attended but did not have an opportunity to put their hand up) and the property sold for $170,000 above the acceptable offer for $1,770,000.

The market sentiment appears to be improving but also the lack of stock is also contributing to the higher bidders per property.  Unfortunately, there are no signs that the stock levels will improve in the immediate future.

Have a great week.

David Easterbrook

Hi,

The clearance rate dipped slightly over the weekend with 685 auctions reported to the REIV.  From 493 properties that sold, 375 sold at auction, 118 before auction and 192 passed in.  There were an additional 133 properties that sold via private sale.  Volumes are considerably down from last year where for the same weekend in 2022 there were 1,227 auctions producing a clearance rate of 75%.

CoreLogic released data last week that supported the downturn in the property markets across the country is easing with the four week rolling average of property prices showing that they actually marginally increased, Sydney (+0.8%), Melbourne (+0.2%) and Perth (+0.1%).   This is largely due to a lack of new listings which CoreLogic reports to be down 19.9% from the previous five-year average for the same time of year.

CoreLogic also reported that overseas migration is rising and is putting pressure on property prices.  With vacancy rates so low, people moving into Australia are opting to buy rather than rent.  However, there are still some challenges in 2023 for the property market with interest rates predicted to rise another 0.5% to 1% over the course of the year.  There is speculation though that the RBA may pause on rising interest rates next month to allow time to see if the interest rate increases have already had some impact on slowing inflation.  Will be interesting to see what unfolds.

2/39 Wheeler Street, Ormond went to auction in front of almost 100 people on the weekend.  Five bidders participated in the auction with many not even having an opportunity to put their hand up.  The two bedroom, two bathroom unit, one of two on the block was quoted $790,000 to $880,000 prior to auction.  It sold under the hammer for $1,040,000.

On the other side of town, the auction of a three bedroom home at 111 Greeves Street, Fitzroy was contested by three bidders.  The property was quoted $1,550,000 to $1,650,000 prior to auction and sold for $1,724,000 which was $44,000 above the reserve price.

Have a great week.

David Easterbrook

Hi,

The clearance rate over the weekend improved again resulting in solid rate of 76%.  There were 608 auctions reported to the REIV of which 337 sold at auction, 123 before auction and 148 passed in.  There were an additional 298 private sales which is a high number and demonstrates that many vendors are still choosing to sell by other means than auction.

PropTrack (a company owned by the REA group who run a large valuation platform) released data last week which suggests the rate of property price declines was now minimal and the median house price remained stable in metropolitan Melbourne at $903,000 in January.  Regional Victoria’s median house price also fell only marginally and remained stable at $593,000.  This supports what we have been seeing on the ground over the past month or so and the improved sentiment that we have seen so far this year.

There is a sense that some buyers are factoring in interest rate rises into their budgets and just getting on with it.  The drop in stock levels has no doubt assisted in keeping the market stable but there are no signs that there will be a flood of properties coming onto the market any time soon, even with many mortgages changing from fixed rate to variable in the near future.

Interestingly PropTrack’s data for the rental market showed that Melbourne’s rent hit a record high in December with the median rent rising 2.3% to $450 which is a 9.8% increase since the start of 2022.

26 Bay Street, Brighton went to auction over the weekend which is a well located, 1,311 sqm block of land with a large unrenovated house on it.  The bidding opened at $7,100,000 and the property sold for $7,300,000 with active bidding.

The auction of 23 Malakoff St, Caulfield North attracted a huge crowd on the weekend with the first bid of $3,000,000 putting the house immediately on the market.  The renovated four bedroom, two bathroom pretty period home was in high demand and the competitive auction achieved a price of $3,540,000, which was over $540,000 above it’s reserve price.

Have a great week.

David Easterbrook

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