Hi ,
Auction numbers are down considerably in comparison to last year with 656 auctions were reported to the REIV on the weekend (same time last year was 1,296 however we just came out of a long lockdown), 329 sold at auction, 119 sold before auction, 1 after auction and there were an additional 175 private sales.
As the weeks get close to Christmas, it appears to be becoming less likely there will be a late run of properties or even buyers coming into the market. The feeling around the city is that Christmas has already begun. Christmas trees are up, some parties are happening, shops are filled with Christmas items for sale, Santa has even arrived at the shopping centres for photos. This is unusually early to previous years.
As a result, I feel that the window for buying property this year is going to cease a little earlier than anticipated (although there will no doubt be quiet/off market transactions happening right up until Christmas Eve). Stock levels will likely remain low and there will be some very motivated vendors who are wanting to sell their properties before Christmas. On the flip side to this though, it doesn’t appear that there will be a huge amount of vendors rushing to put their properties on their market early next year either. So we could be in for a bit of slow start unless the RBA pauses interest rate rises, which appears to be on the horizon. This could stir up activity from both buyers and sellers.
On the ground, auctions were patchy with some properties selling under the hammer with multiple bidders, some properties selling immediately after passing in to one bidder and others passing in and going back on to the market as private sale. Runaway results are few and far between. There is still a willingness from buyers to transact but some are waiting until vendor’s expectations come down to a price they are willing to pay.
159 Park Drive, Parkville went under the hammer with auction participation from three bidders. The stunning terrace home which had been restored keeping many period features and blending with some modern touches was sought after but secured by a downsizer couple. The property was quoted $3,000,000 to $3,300,000 prior to auction and sold under the hammer for $3,535,000.
Have a great week.
Kim Easterbrook
Hi ,
The clearance rate yet again remained in the 70%’s with 500 auctions being reported to the REIV. 262 sold at auction, 87 sold before auction, 1 after auction and 150 passed in. There were an additional 127 private sales reported. The clearance rate for this week is currently sitting at 70% with the final clearance rate for last week reaching 73%.
There are only a couple more weeks left of auction campaigns to commence before the Christmas hiatus and it is looking extremely unlikely there will be a run on of new listings before the Spring season finishes for 2022. Usually this time of year the volume of off market transactions starts to rise and we are already receiving phone calls from agents who have listed properties scheduled for auction in February/March next year, but will consider selling now.
We are having many discussions with buyers who are in the market to purchase a property, some are willing to pull the trigger on the search now whilst many are waiting ‘to see what happens with prices’ and are looking to buy next year. These are promising signs that the first half of 2023 will be an active market should these buyers decide to transact. It also means that there could be more competition on properties and the market might actually be more favourable this side of Christmas.
Whilst the clearance rate continues to remain stready, there are many auctions that are passing in, some on no bids, some on one bid and others on multiple bids, and many vendors are adjusting reserves to sell the property on the day. Others though are attracting good bidding at auction and selling under the hammer. It is a real mix.
A single-fronted Victorian at 67 Courtney St, North Melbourne attracted six bidders. The very small, entry level home was quoted $880,000 to $920,000 prior to auction. The two bedroom, one bathroom home was popular with buyers but sold under the hammer within the range at $910,000 on a reserve price of $900,000. It is a true reflection of the market where buyers are willing to buy but are not prepared to pay big dollars to secure a property.
In Geelong, the auction of 15 Skene Street, Newton attracted strong interest. The property was advertised at $1,300,000 prior to auction which was the reserve price. The five bedroom, two bathroom, striking unrenovated period home on 787 attracted interest from 5 parties at auction. The property sold for $1,520,000 under the hammer.
Have a great week.
Kim Easterbrook
Hi,
The REIV clearance rate again remained steady at 69%, even on a higher number of auctions which is demonstrating the property market is remaining stable. 410 properties sold at auction, 134 selling before auction and 244 passed in. There were an additional 151 private sales. Interestingly the numbers were much higher last year as we came out of the last lockdown with 1,204 auctions reported to the REIV and 90% of them selling.
The median house price in Melbourne fell 7.4 per cent in the September 22 quarter according to the REIV to $993,000. But the data is certainly showing some inconsistencies. Some suburbs are continuing to have price growth whereas others are declining. The median house price can also be skewed if there are less higher end properties selling which can also bring the median house prices down. Although on the ground, there is no doubt there has been some softening in prices (generally speaking) and many vendors are realising this and adjusting their price expectations in order to have their property sold. Units and apartments seem to be holding their prices a little more with a quarterly change of 2.8%. The data in Regional Victoria is suggesting that the median house price has dropped 2.8% to $611,000 and units/apartments down 2.3% to $425,000.
The rental market is one of constant discussion with some investors getting excited about rental prices increasing significantly as the media suggests. There is no doubt the amount of vacant properties available is tightening. As a company, we have never had such little supply available for lease. That being said, it hasn’t translated in huge rent increases yet in the Melbourne and Geelong rental markets. Properties are leasing out quicker but still are somewhat price sensitive. That being said, with the sudden tightening of supply, this absolutely could start translating into rent rises. It will be interesting to see what happens over the next three to six months.
There were still plenty of buyers out on the weekend and family homes are still proving to be a stronger segment of the market. 21 Parker Street, Ormond went to auction and is a well located, five bedroom, two bathroom, updated period home on 666 sqm. The property was quoted at $2,000,000 to $2,200,000 prior to auction and attracted six bidders with the property selling for $2,292,000 on a reserve of $2,170,000.
Have a great week.
Kim Easterbrook
Hi,
There were 485 auctions reported to the REIV on the weekend resulting in 259 selling at action, 80 before auction and 146 passing in resulting in a clearance rate of 70%. There were an additional 283 private sales reported.
It seems we are not quite back into a normal Spring season yet. Stock levels are still low where a normal Spring auction season would usually result in a flurry of properties coming onto the market. Many vendors are holding off selling their properties until more confidence comes back into the market.
That being said, the auctions we attended on the weekend were all competitive with not just one or two bidders, some upto five bidders. The property market is definitely showing some resilience over the negative press and rising interest rates. With the four banks all agreeing the end of rising interest rates is in sight, it is giving buyers confidence to take advantage of the current market conditions which is more favorable to buyers than the same time last year.
Whilst auction numbers are down, there is a rise in private sales which often happens in a property market that is not booming. Private sales allow the agent more power in a negotiation than an auction that could only have one or two bidders. It allows the agent to keep their buyer pool cards close to their chest where an auction publicly displays if there is lack of demand on a property.
Thornbury was popular with buyers on the weekend with two auctions attracting competitive bidding. 21 Mansfield Street, Thornbury auction was brought forward a week due to an acceptable offer of $2,450,000 being offered prior to auction. The four bedroom, two bathroom, renovated home on over 400 sqm of land was quoted at $2,100,000 to $2,300,000 prior to auction. The auction attracted three bidders over $2,450,000 with the property selling for $2,615,000, $315,000 over the reserve price.
Another auction at 16A Kelvin Grove, Thornbury was quoted at $950,000 to $1,045,000 prior to auction with the auction attracting five bidders. The well located two bedroom, one bathroom home, in liveable condition but requiring an update in the future was popular. The opening bid of $950,000 was quickly challenged with four other bidders participating in the auction. The property sold for $1,180,000 which was $120,000 over the reserve price.
Have a great week.
Kim Easterbrook
There were 512 auctions reported on the weekend to the REIV producing a clearance rate of 69% yet again. 287 sold at auction, 66 before auction and 158 properties passed in. There were an additional 168 private sales.
The Reserve Bank of Australia met last week and increased the cash rate to 2.6 per cent. The increase of 25 basis points was lower than the 50 basis points that was widely predicted. Whilst this hasn’t stopped many buyers from being cautious, the rate increase slow down has given some buyers confidence that Spring might be the time to buy. The REIV auction clearance rate is still remaining steady in the high 60%’s and whilst stock levels are predicted to rise, it is unlikely to be a highly active Spring season that we had seen in pre-Covid years.
At Elite, we noticed a difference between our new buyer enquiry levels from the 0.5% rate rise in September to the 0.25% rate rise in October. Last week, after the cash rate announcement, our phones were busy with buyers ready to transact in Spring. Three of the four big banks have also adjusted their interest rate predictions with ANZ predicting a peak of 3.6% in May, Westpac predicting a peak of 3.6% in March, NAB predicting 3.1% in February and CBA predicting 2.85% in November this year. Whilst these are only predictions, the good news is that we may be only upto 1% away from interest rate stability, and to levels that are more the norm. Certainly no one is anticipating we will have interest rates as low as what we have had over the past two years again, and buyers are starting to regain confidence around that.
The market is not allowing vendors to be greedy, but ones who are realistic in price are mostly selling. Auctions we attended were mostly selling close to the reserve with fewer runaway results. 1 Cherbourg Avenue, Beaumaris went under the hammer which is a three bedroom, two bathroom unrenovated home in the Beaumaris Secondary College zone which is very highly sought after. Land size is 593 sqm. The property was quoted $1,600,000 to $1,650,000 prior to auction and sold for $1,707,000 with the auction attracting four bidders. $40,000 above the reserve price.
Have a great week.
Kim Easterbrook
Hi,
There was an increase in auction activity over the weekend as we head into the Spring season. 542 auctions were reported to the REIV, 287 sold under the hammer, 85 sold before auction resulting in clearance rate of 69%. There were an additional 344 private sales.
Stock levels are on the rise and many are asking whether now is the right time to buy. With higher stock levels predicted, some degree of market uncertainty and rising interest rates, this could actually make for the best conditions for a buyer that we have seen in quite some time, and a time that might be short lived. As I mention time and time again, the property market is not as dire on the ground as the media are reporting. The clearance rate is consistently sitting in the high 60’% and the market is feeling stable. Most properties that we are purchasing at present are under competition from multiple buyers.
CoreLogic just released their quarterly data which suggests that Melbourne house prices dropped 1.1% in September and 3.7% for the 3rd quarter. This somewhat does reflect what we are seeing with some of the results however it can’t be said for all properties with quality family homes being in short supply and still achieving some high prices.
Once we see inflation under control and stability in interest rates, there is no doubt we will see confidence back in the property market. There are many buyers just sitting on the fence right now waiting for the right time to buy. Unfortunately, we never know when the bottom of the market actually is until we see a rise in property prices again. However, whilst there are less buyers willing to transact at this particular point in time and stock levels are rising, now could be the right time for some of these buyers to transact.
128 Farrell Street, Port Melbourne went under the hammer on the weekend and is a very well located, two bedroom, one bathroom single level period home in need of a makeover. Quoted $1,150,00 to $1,250,000 prior to auction, three bidders competed to secure the property pushing the price $154,000 over reserve to sell for $1,354,000.
Have a great week.
Kim Easterbrook
Hi,
There were 653 auctions reported to the REIV on the weekend achieving a clearance rate of 70%. 352 properties sold at auction with 106 selling before auction. There were an additional 195 private sales. Interestingly, last week’s final clearance rate was also 70% on 677 auctions.
We have entered into a market of negotiations rather than properties mostly selling under the hammer. Most auctions are experiencing less bidders than what they would have late last year. 70% clearance rate for the past two weeks represents a stable market where buyers and vendors are willing to transact. More auctions are passing in but they are passing in on a genuine bid and some buyers are taking advantage of the current market conditions. It is a tricky market though, some properties are selling for less than what they should have, yet other properties are selling well above expectations.
The family home market currently is a strong segment of the market. Lack of stock and maybe a hangover of demand from Covid lockdown days may be driving this.
A couple of examples of these are:
A big auction on the weekend of 281 Richardson Street, Middle Park. The property was quoted at $4,000,000 to $4,400,000 prior to auction and the auction attracted bidding from five buyers. The crowd of over 200 people watched the price achieve over $5,000,000 where the property sold for $5,050,000 which was well above the reserve price.
A Geelong property broke the residential house price record for the suburb with 5 The Esplanade, Geelong going under the hammer. The four bedroom, two bathroom home on 892 sqm with absolute waterfront views was quoted at $4,000,000 to $4,400,000 prior to auction but interestingly the reserve was set at $3,800,000. The bidding (from three strong buyers) went way past this and the property sold for $5,225,000.
Have a great week.
Kim Easterbrook
The REIV auction clearance rate remained stable over the weekend with 541 auctions reported. 372 properties sold with 282 of those selling at auction and 91 before auction. There were an additional 190 private sales.
The increase in interest rates last week came as no surprise with the official cash rate rising to 2.35%. There appears to be a consistent pattern with buyer behaviour each time an interest rate rise occurs with the week after, some buyers coming to a standstill. Some need time to adjust to the idea of higher mortgage repayments but also need time to calculate what that means for their budget.
Some auctions last weekend had large numbers in attendance but few willing to put their hands up. Those buyers that are confident enough to bid at auction are often buying the property immediately after it passes in. This means that vendors (generally speaking) are willing to negotiate to ensure they sell their property and likely the buyer has paid less than they were willing to.
We are still witnessing high numbers of buyers walking through open for inspections and also large numbers attending auctions. I believe there are many buyers out there who are currently sitting on their hands waiting to see what happens with interest rate rises and property prices. We know it is likely there are more interest rate rises to come, but once these rises slow down and then cease, it is likely the dormant buyers will come back into the market and be willing to purchase.
1/50 Grant Street, Malvern East went to auction on Saturday which is a well located, three bedroom, one bathroom villa unit in good condition. The property was quoted at $1,050,000 to $1,150,000 prior to auction. Five bidders in total participated in the auction where the property was announced on the market for $1,210,000 and sold for $1,363,000.
In Geelong, the auction of 15 Sanglen Terrace, Belmont attracted a large crowd with the four bedroom, two bathroom, two car updated family home quoted at $900,000 prior to auction. Bidding commenced at $950,000 with four bidders in total pushing the price to $1,055,000.
Have a great week.
Kim Easterbrook
The clearance rate moved back into the 70%’s over the weekend with 546 auctions reported to the REIV. 316 properties sold at auction, 67 before auction and there were an additional 276 private sales.
All eyes will be on the Reserve Bank of Australia with their monthly meeting scheduled for tomorrow. Opinions are divided as to whether there will be a 0.25% or 0.5% rate rise tomorrow with some predicting the rise to be 0.5% tomorrow and then the rises scaling back. It seems we are already seeing some relief to cost of living with some prices coming back down on the supermarket shelves but unfortunately fuel excise will go back to normal rates at the end of the month which means we will be paying for more at the petrol pump. Any real impant of interest rate rises has a lagging affect and therefore, it is believed the RBA will take the foot off the pedal to monitor the overall impact in the months ahead.
The RBA cash rate is currently sitting at 1.85% which is still resulting in cheap money for homebuyers. Over the past few weeks, we have seen a significant positive shift in the confidence of buyers and as a company we have had an increase in new buyer enquiry and willingness to transact. Many buyers are factoring in these interest rate rises within their budgets and adjusting accordingly. Banks are also factoring higher interest rates in the amount they are prepared to lend property buyers.
Spring is gearing up to be an active few months with predictions of stock levels rising but also a rise in buyers in the market. There still could be a two speed market with A grade properties (properties with limited compromises) selling extremely well under strong competition and properties that have compromises (being unrenovated, poorly located and having inferior floor plans), having limited buyer interest.
The auctions we attended on the weekend were mostly competitive with one of them being 1/1 Bowen St, Malvern East. The single level, three bedroom, two bathroom, double garage modern townhouse was extremely popular with buyers and the agents were reporting large numbers through each of the open for inspection. The property was quoted at $1,000,000 to $1,100,000 prior to auction but mid campaign, due to the interest the price quote was increased to $1,100,000 to $1,200,000. 7 bidders in total with some not even getting the opportunity to put their hand up (buyers being a mixture of downsizers and young families) drove the price to $1,410,000 which was $310,000 over reserve. The closest comparable sale was $1,353,000 which was the rear townhouse which was identical in size and condition and that property sold in April 2022.
Have a great week.
Kim Easterbrook
The auction clearance rate dropped back into the 60%’s on the weekend with 518 properties going under the hammer. 279 sold at auction and 67 sold before auction resulting in a clearance rate of 67%. There were an additional 250 private sales.
There is no doubt we have seen the property market stabilise and we have not experienced the decreases in property prices that many ‘so called’ experts first predicted. However, we are very much in a ‘two speed property market’ where some properties are selling much higher than expected, and then others are selling less for or exactly what the property is worth. There seems to be an inconsistency in the final result in which some cases results in the buyer doing well in their purchase, and then in some cases the vendor has achieved a high sale price. More records are being broken with a house in Bentleigh achieving the highest price for a residential house sold over the weekend.
Generally speaking, properties that are well located, updated and have a good floorplan are selling well under competition from multiple buyers. These properties have also been marketing correctly which means presented immaculately and priced accurately online. Other properties that are compromised such an being unrenovated, poorly located, inferior floorplans or not presented well are the ones that tend to be struggling. Buyers are still circling these properties but often waiting for them to pass in at auction, sticking to firm budgets when negotiating and making offers with ‘subject to finance clauses’.
I attended an auction yesterday at 1/21 Turner Avenue, Glen Huntly where there would have been almost 100 people in attendance. The three bedroom, two bathroom single level townhouse is well located, dated but immaculate and styled well with hire furniture for sale. The bidding was slow to start though with the auctioneer kicking off the auction with a vendor bid of $950,000. However five bidders participated with the buyers being a mix of first home buyers and downsizers. The property was quoted $995,000 to $1,090,000 prior to auction and sold for $1,190,000.
Have a great week.
Kim Easterbrook
