807 auctions were reported to the REIV over the weekend. 478 sold at auction, 143 sold prior to auction and 186 passed in resulting in a clearance rate of 77%. There were an additional 178 private sales. In comparison, there were 1,241 auctions held on the same weekend last year producing a 76% clearance rate.
Our suggestions that the property market bottomed at the very end of 2022 is now being supported by the latest CoreLogic data released last week. The data suggests that property prices actually increased in March 2023 which was the first time there has been an increase in property prices in 10 months. Sydney’s property prices increased 1.4% in March resulting in an increase of 0.4% for the quarter. Melbourne’s property prices rose 0.6% in March to reduce the quarter reduction to -0.9%. Melbourne often follows Sydney’s trend so the April to June quarter will be very interesting especially with the clearance rate consistently reaching a solid mid to high 70%’s.
Good news for investors (not so good news for renters however) showing that rents are still rising with Melbourne, Sydney, Brisbane, Adelaide and Perth all under going rental shortages in both the housing and unit markets. The National Housing Finance and Investment Corporation (NHFIC) has estimated that 190,000 more households will form between 2023 and 2033 and that by 2027, there will be a deficit of 106,300 dwellings. In short, we will not be building enough houses to cover the demand (which could worsen if the rate of builders going out of business continues).
With immigration numbers rising and confidence building that we are infact close to the peak of the interest rates rising, we may in fact see a busy winter period rather than the slump winter usually brings.
A house in Elwood that was in disrepair went to auction on the weekend in a market where houses that need renovating are generally speaking not performing. 35 Rothesay St, Elwood was quoted $930,000 to $1,020,000 prior to auction and is a two bedroom, one bathroom, single fronted period home which is in such bad condition, it was not liveable. Four bidders participated in the auction and the property was announced on the market at $970,000 and sold for $1,130,000.
In Canterbury, another unrenovated property went to auction on Saturday and was heavily contested. 5 View Street, Canterbury is a five bedroom, two bathroom, unrenovated period home on 852sqm of land (no heritage overlay). The property was quoted at $3,600,000 to $3,900,000 prior to auction and the property sold for $5,100,000. It is an understood an international student was bidding on behalf of his parents who are looking to move to Melbourne in the future.
Have a great week.