There were lower auction numbers over the weekend as a result of school holidays and also being in the middle of winter. 383 auctions were reported to the REIV resulting in a clearance rate of 73%, which is the lowest level it has been for quite some time. As a comparison, there were 524 auctions for the same time last year resulting in a clearance rate of 63%. In addition, there were 278 private sales which is actually a reasonably strong weekly number. This could be due to the increase in off market activity which is quite normal to occur over the winter period.
According to CoreLogic, house values across the country rose for the fourth consecutive month in June but growth seems to be slowing down. Home values have risen 2.8% over the quarter to end of June. The drop in the clearance rate may demonstrate the market sentiment is falling again (we may need a few more weeks of data to understand if that is really happening) which may open a small window over the colder months for buyers who have been battling low stock numbers and strong competition on some properties.
All eyes with be on the RBA tomorrow watching to see if interest rates will be lifted once again. Opinion is divided as to whether this will happen or not but it if it doesn’t happen in July, it seems likely to happen in August. Either way, it is likely we will see interest rates rise even further over the next few months.
The auction of 1/1 Mahvo Street, Bentleigh was a very competitive auction. The property is a three bedroom, two bathroom unit very well located close to Centre Rd. Whilst only 3 active bidders, it appeared there were many others there that didn’t get a chance to put their hand up. The property was quoted $1,100,000 – $1,200,000 prior to auction, announced on the market at $1,240,000 and sold for $1,415,000.
With interest rates rising, buyers are looking further at compromises to get into the property market. This isn’t just moving further out from the city, but looking at smaller properties (being villa units/townhouses on subdivided blocks and perhaps even apartments).
1/30 Shelley Street, Elwood is a two bedroom, one bathroom apartment with a courtyard. The property was quoted $550,000 to $600,000 prior to auction with four bidders participating and the property selling $30,000 above reserve for $630,000.
Have a great week.