Melbourne’s auction clearance rate over the weekend remained steady at 80% on 585 auctions reported. 357 of those sold at auction, 110 before auction and there were an additional 278 private sales.
The State Government announced last week of stamp duty discounts which is welcoming news to many property buyers. There will be a 50% stamp duty discount on newly built homes valued upto $1m and 25% discount for established properties for upto $1m for the rest of the financial year. Whilst welcoming news this is likely to encourage more buyers into the market which could result in further pressure in prices.
There is such a buzz around Melbourne at the moment…cafe’s and restaurants are open, masks are off outside and there were large attendances at many auctions on the weekend (socially distanced of course). There is a feeling that we are back to some kind of normality and this was also the case at auctions on the weekend with active bidding and in some cases, properties selling well above reserve.
We attended many auctions in Melbourne and Geelong with all of them selling well above reserve. The type of bidders were varied from investors, first home buyers, upsizers and downsizers.
The auction of 5/86 Cromwell Road, South Yarra achieved 9 bidders mostly from first home buyers with the property selling for $111,000 over reserve. The property was quoted $600,000 to $640,000 prior to auction and was announced on the market at $620,000 at auction. The last two sales in the block sold for close to $700,000 but this property was unrenovated, (almost unliveable), so to achieve $731,000 was a very good result for the vendor.
41 Middle Cres, Brighton sold for $5,425,000 at auction which was over $1,000,000 above reserve. This huge result was only achieved through two buyers who both desperately wanted the property. There were three bidders in total but two of these bidders belonged to the one party. The bidding was so fast and in large increments that no one else got an opportunity to put their hand up and I have no doubt there were other buyers there to bid. It just goes to show that auctions can achieve huge results if emotion comes into play as both buyers had pushed way past their budgets to try and secure the home.
In Regional Victoria, 5 bidders fought to secure a renovated home at 5 Spring Street, Belmont. The property was quoted at $670,000 to $700,000 prior to auction and was announced on the market at $700,000. The bidding kept going until it sold for $750,000. Selling agents have been reporting that buyer enquiry has doubled or even tripled in some cases since the ‘ring of steel’ was lifted.
After so many dire forecasts this year about the Victorian property market, it is a nice change to see reports of confidence with many experts now predicting property prices to rise. With record low interest rates, increased confidence, unemployment rates falling, stamp duty concessions and the likely vaccine roll out next year, an increase in property prices next year could quite be on the cards.