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.