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Melbourne’s property market is running fast

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October 18th, 2021

Another big online auction weekend with 960 auctions being reported resulting in a clearance rate of 89%.  557 sold at auction, 287 sold before auction, 6 sold after auction and there were an additional 278 private sales.  Last week the end result was 1,140 auctions report with a clearance rate of 86%.

For me, personally, I don’t think I have worked in a real estate market that is running as fast as this one.  Properties are selling quickly, many before auction, vendors are motivated to sell if they achieve the price they are hoping for and buyers are mostly paying these prices.  We are not seeing the steep incline in prices that we saw after lockdown 2.0 however we are still experiencing strong sales results, multiple offers/bidders and properties selling quickly.  Many selling agents are also tired of one on one private inspections with them having to stand outside properties, in the cold, wet weather for hours on end.  This is also resulting in some selling agents encouraging vendors to take offers before auction.  We are aware of one Bayside agency who had 9 auctions scheduled for last Saturday in which 7 had sold prior to auction.

I spoke with Chris Devlin from Quora Financial last week to get his take on the changes in the APRA lending regulations and what impact will this have on lending.   Effective from the 1st of November, he mentioned that lenders will increase their rates on their servicing calculator, which means if a lender offers you an interest rate of 2%, the bank will use an interest rate of 5% for their servicing calculator.   The reasons behind doing this is to ensure that their customer is not sensitive to interest rate rises and to assist tackling property market inflation.  Current pre-approvals issued prior to November 1 will be honoured provided there has been no material change when the client purchases their property.  Existing pre-approvals can’t be extended without applying the new servicing criteria.

A property in Toorak sold last week which has become the most expensive house in Australia to sell at auction.  47 Lansell Road, Toorak was listed at $40m to $44m and was to be sold via an Expressions of Interest campaign.  However, there were two interested parties so the property ended up going to auction and the price achieved is undisclosed but it was record breaking.

Have a great week.

Kim Easterbrook

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