There were 756 auctions reported to the REIV over the weekend producing a clearance rate of 65%. 392 properties sold at auction, 96 before auction, and there were an additional 146 private sales.
The media have again jumped on the ‘property prices to plummet’ bandwagon which is not a new concept for us to battle. On the ground though in Melbourne, Geelong and Ballarat, the feeling is somewhat quite different.
Early 2019 (prior to the Federal Election) and early 2020 (just as the pandemic began) were much more difficult markets to work in than the current market with buyers virtually going underground. In 2019, the Labor Government proposed to abolish negative gearing which threw the property market into turmoil. In addition to that, 60 Minutes came out with a report that property prices were predicted to drop by 20% which was the last nail in the coffin, and buyers lost all confidence. The property market pretty much came to a grinding halt until Labor lost. After this loss, buyers slowly started to gain confidence again to the point the property market was quickly back to some kind of normal.
In 2020, as we were just becoming aware of Covid-19 and the fear of a potential pandemic, the property market again came to a grinding halt. Buyers (and sellers) put their property plans on hold as we were all entering into unknown territory. But even then, in time, people just had to get on with it and selling and buying agents worked out clever ways to still transact even in the toughest of lockdowns. Property investors who purchased during this time generally have done very well with their property investments.
In both of these markets, and during the most difficult times, the media went to town on how bad the property market is and how prices are going to plummet. And yet again, the market was resilient and quickly bounced strongly.
In 2022, rising cost of living is resulting in high inflation and rising interest rates. This has now attracted media attention and reports that the property market is going to plummet. This market we are currently working in does not appear to be anywhere near as tough as the 2019 pre-election market and the 2020 Covid-19 market. As a company, we are seeing good levels of new buyer enquiry and confidence in buyers to transact. We also know that many buyers are viewing the current interest rates as still cheap money and factoring in the inevitable rate prices into their overall spending power and budget. It actually feels like a normal winter market which we have not seen for a number of years.
The sunshine on Saturday brought out the spectators with many attending the auction of 10 Muir Street, Richmond. The 3 bedroom, 2 bathroom, 1 car terrace home was quoted $1,800,000 – $1,980,000 prior to auction. Four bidders participated in the auction with the property being announced on the market near the top of the range. The property sold well above reserve for $2,056,000.
680 Drummond Street, Carlton North went to auction on Saturday with a price guide of $4,100,000 to $4,500,000. The property is a four bedroom, 3 bedroom, 2 carpark home on 533 sqm. The bidding flew past the quoted range with the property selling for $4,900,000 under the hammer.
Have a great week.