It was the biggest online auction weekend we have had yet in Melbourne, with 897 auctions being reported to the REIV achieving a clearance rate of 86%. The same time last year there were only 46 auctions. 233 properties sold before auction, 533 sold at auction, 2 after auction and 129 passed in. There were an additional 206 private sales.
Last week, APRA made the first change to lending criteria in an attempt to slow down rising property prices. However it seems they are going with a softly, see how it goes strategy, rather than being too heavy handed and potentially bringing the property market to a grinding halt.. On Wednesday, APRA increased their loan serviceability rate ‘buffer’ from 2.5% to 3.0% which is expected to reduce borrowing power by around 5%. It was predicted they would tighten debt to income ratio which at this stage has not occurred. When a bank assesses the ability for a borrower to repay a mortgage, they calculate the repayment with the current interest rate plus a ‘buffer’ which is the number that has been increased.
The online auctions we attended over the weekend were all competitive with multiple bidders and all selling under the hammer. The auction of 364 Dorcas Street, South Melbourne opened up on a genuine opening bid of $1,200,000 and was announced immediately on the market. The auction continued with a flurry of bids before selling at $1,471,000. A big price considering the house has not been structurally renovated, land size is 128 sqm and there are traffic lights and intersection right at the front door.
The upsize market continues to be strong with 62 Tranmere Avenue, Carnegie selling competitive on the weekend. There were seven bidders registered with three competing for the keys. The price guide of the five bedroom, three bathroom home was quoted at $1,850,000 and $1,950,000 with the property being announced on the market at $2,030,000 and selling to a family for $2,060,000.
The Geelong market continues to go from strength to strength and the auction of 7 Hume Street, Grovedale was heavily contested. 6 bidders in total including 3 buyer’s advocates. The property was quoted $639,000 – $689,000 prior to auction, announced on the market at $705,000 and sold for $795,000.
Have a great week.