There were 443 property sales in Melbourne last week which is an increase on last week’s final sales numbers. The clearance rate was 65% on 415 auctions demonstrating we are in a balanced market. A balanced market is where housing prices are stable and there are an equal amount of buyers and sellers in the marketplace. That being said ‘on the ground’ we are experiencing a lack of quality properties. That being ones that ticks the boxes for a lot of buyers. An example of this could be a structurally renovated period home, in a quiet street, close to shops and cafes, in an inner city suburb.
Many people are asking us about the impact on the property market a spike in Covid-19 will have. In my opinion, it could result in us going back to how we were transacting in April and May. More online auctions, less people at open for inspections and so on. The industry adapted very well then and will easily be able to revert back should we need to. It also could result in a further decrease in stock on the market as sellers become afraid to have too many people come through their properties, or could again give rise to an increase in off market (quiet) listings.
We are also being asked on a daily basis as to whether we are seeing any distressed sales. In actual fact, we haven’t seen any properties selling at largely discounted prices. It could be reasonable to assume that if anybody was experiencing financial hardship, they would be recognising this now before loan repayments start again in September. These particular people would likely currently have their properties on the market to avoid having to sell their property under distress. Even if there was extreme urgency, the amount of buyers in the market are creating competition and therefore not allowing properties to sell cheap. On the flip side, we are very rarely seeing runaway results where a property is selling significantly above the reserve price. Properties are mostly selling within a 10% range of market value.
The sale of 137 Male Street, Brighton is a great example of where the market is at. The property sold at auction on the weekend with three bidders for $2,470,000. The property sold two years ago for $2,350,000 and previous to that it sold for $2,010,000 in 2015. As you can see consistent growth has been achieved over the past five years.
Have a great week.
Kim Easterbrook
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