Hi ,
The weekend’s auction numbers were strong with 1,038 auctions reported to the REIV. 580 sold at auction, 244 before auction, 4 after auction and there were an additional 213 private sales recorded. The overall clearance rate was 80% and the final clearance rate for last week is sitting at 82%. There are over 1,000 auctions scheduled next weekend.
The next two weeks are likely to be the final two weeks of new auction campaigns for 2021 and then we will head into a market of private sales and off market properties with at least a two to three week break over Christmas.
The ABS released their September quarter data and it looks like it is going to get harder for some buyers to enter the property market with the ABS releasing the wages growth for the year to September quarter being only 2.2% and 0.6% for the quarter. Wage growth is expected to rise over the next twelve months with staff shortages being reported across many different industries. However, this wages growth will not be anywhere near the rate that property prices have increased over the past twelve months with prices rising from 20 to 30% in the major capital cities and some regional areas and predictions that property prices will further rise again next year.
A four bedroom, three bathroom townhouse at 18A Sea Parade, Mentone went to auction over the weekend with an agent price guide of $1,650,000 – $1,750,000. The auction was well attended with four bidders participating in the auction. The property was announced on the market at $1,860,000 and sold for $1,893,000.
A two bedroom apartment at 13/38 Northcote Road, Armadale went under the hammer and was highly sought after by first home buyers. The property was quoted at $600,000 to $650,000 prior to auction with the last two bedroom apartment in the block selling for $665,000 in January 2021. The property was announced on the market at $650,000 but bidding soared past this to sell for $711,000.
Have a great week.
Kim Easterbrook
Hi ,
The clearance rate remained steady over the weekend at 82% on 1,052 auctions reported to the REIV. 606 sold at auction, 260 sold before auction, 1 sold after auction and 185 passed in. There were an additional 229 private sales recorded. The final number of auctions reported last week was 1,126 resulting in a clearance rate of 81%. These volumes are very consistent with a usual Spring period and the clearance rate has ever so slightly dropped as a result.
The increase in stock levels have contributed to some of the heat being taken out of the market. That being said though we are still seeing some strong results on properties but these are becoming fewer. Demand for family homes is still very high due to the toll of lockdowns still heavily in the minds of buyers wanting more space with extra accommodation, home offices and bigger backyards. As we head into Christmas, the amount of properties on the market will start to decline again so this relief in the market might only be very short term.
It appears that the Mornington Peninsula property market has turned a corner with a drop in median house price in the September quarter of 0.6 per cent which is the first time prices have declined/stabilised since December 2018. Whilst there is still prediction of growth to occur, the growth rates will be at lower levels (the growth rates for the past two years are not sustainable).
124 Harcourt Street, Hawthorn East went to auction on the weekend and was in demand. The property is well located, offered lots of accommodation, was updated and as a result buyers were prepared to bid strongly to secure it. The bidding commenced at $3,700,000 but quickly jumped to $4,000,000 (close to the reserve) but bidding was fierce with the property selling for $4,700,000 which was almost $700,000 over the reserve price.
An Albert Park home sold for over $1,650,000 over the reserve price with 53 St Vincent Place going under the hammer. A large crowd attended the auction, with the renovated period home having a price guide of $8,000,000 to $8,800,000 prior to auction. The property was announced on the market at $9,500,000 but likely to have hit the reserve prior to this announcement with the property selling for $11,110,000.
The inner north market has been very strong for the whole of 2021 and the auction of 80 Union Street, Brunswick was strongly contested by 5 bidders. This unique corner shop which has been converted into a residential home (in need of an update though) had a price guide prior to auction of $1,700,000 to $1,730,000. The property was announced on the market for $1,730,000 but bidding did not stop there with the property selling for $1,961,000.
Have a great week.
Kim Easterbrook
Hi ,
The clearance rate has been remaining steady with 852 auctions being reported to the REIV achieving a clearance rate of 82%. 483 properties sold at auction, 213 before auction, 1 after auction and 155 properties passed in. We have three to four more weeks of new auction campaigns before the market starts to wind down for Christmas. This is when we will expect off market activity to rise and new listings advertised as private sale campaigns.
The Reserve Bank met last week and again kept interest rates on hold however they did mention the plan to not increase interest rates until 2024 might be brought forward if wages growth and inflation exceeded its current expectations. The RBA is likely to use a wait and see approach as we are still entering into the unknown of whether Australia could be hit with a new Covid-19 variant or the take up of booster shots in the future. It is looking unlikely that interest rates will be used as a tool to ease property price growth.
The majority of auctions are now back onsite with most of them performing well over the weekend. I don’t believe we are seeing the same heat in the market that we did earlier this year, however we are still witnessing active strong bidding and many auctions producing strong results.
6/50 Fewster Road, Hampton is an updated two bedroom villa unit with a large floor plan and reasonably sized courtyard. High quality, single level villa units are highly sought after from first home buyers, investors and downsizers and also rent out very well in comparison to some other asset types. The auction attracted bidding from three parties and was quoted $780,000 to $830,000 prior to auction. The bidding opened up at $840,000 but was not announced on the market until $860,000 where another bidder jumped in. The property sold to the first bidder for $920,000.
A huge result occurred in Albert Park with a four bedroom home located in beautiful St Vincent Place sold for in excess of $2,000,000 above the reserve. The property, whilst liveable will probably undergo an upgrade by its new owner and is situated on 506 sqm of land attracted three bidders at auction. It was down to two parties from $10,500,000 who both really wanted to secure this rare piece of real estate. The property sold for $11,110,000.
Have a great week.
Kim Easterbrook
Hi ,
Auction numbers are rising to levels close to what a normal Spring season should be with 968 auctions reported to the REIV over the weekend. The property market remains strong with the clearance rate hitting 90% over the weekend. 575 sold under the hammer, 292 sold before auction, 8 after auction and there were an additional 193 private sales.
Premier Daniel Andrews announced yesterday that Victoria (as a whole) will move to Phase C of the National Plan due to 80% of 16 plus being fully vaccinated. From what we understand, open for inspections for properties up for sale and lease will be allowed to return from 6pm on Friday for fully vaccinated people only (this includes staff). Private inspections will be allowed for people who are not fully vaccinated or partially vaccinated.
Onsite auctions have already resumed with 50 fully vaccinated people allowed to attend onsite. These will be allowed to continue with bigger numbers from this weekend but again, only for fully vaccinated people. The selling agents will breathe a sigh of relief by no longer having to stand outside properties for hours on end. These changes may start to normalise this fast-paced property market that we are currently in.
111 Ludstone Street, Hampton went under the hammer over the weekend and was in very high demand. The unrenovated, 5 bedroom, 2 bathroom home on 683 sqm was quoted at $1,900,000 prior to auction but the end sale price smashed this. Four bidders drove the sale price to $2,620,000 which is significantly above the last unrenovated home that sold in the street in May for $2,050,000 which was on larger land of 794 sqm but on the south side of the road.
51A Durham Road, Surrey Hills was also another popular property at auction. The semi-detached house was quoted $1,600,000 – $1,700,000 prior to auction and the agent received an offer of $1,788,000 mid-campaign and rightly raised the quote range to reflect the rejected offer. The auction was competitive with three bidders driving the end sale price to $2,170,000.
Have a great week.
Kim Easterbrook
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
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.
Kim Easterbrook
Auctions numbers increased significantly last week with 568 auctions reported to the REIV producing a clearance rate of 92%. 396 sold at auction, 123 sold before auction, 2 sold after auction. In addition there were 190 private sales.
Anything over an 80% clearance rate indicates we are in a sellers market and 92% clearance rate is a strong clearance rate based on the auction numbers. This should ease though over the next weeks/months with more properties predicted to come onto the market.
Treasurer Josh Frydenberg last week indicated that restrictions on home lending could be introduced before the end of the year to help slow down rising property prices. In the June quarter, it was found that over 20% of home buyers are borrowing more than six times their income which has prompted the predicted crackdown on high loan to value ratio loans. There are concerns that if and when interest rates rise or if a borrower loses their job, they may fail to meet their loan repayments. There was some positive news however with a rise in owner occupiers and first home buyers taking out mortgages.
The 92% clearance rate produced some strong auction results last week and over the weekend. Many auctions are now being conducted mid week to free up agents for one on one private inspections on the weekend.
10/71 Ormond Road, Elwood sold well above reserve which was a surprise as the property was a ‘company share’ titled property. Banks will usually only lend 50 to 60% on these titles which does limit the potential purchases who can actually buy them. Six bidders participated in the auction of the renovated, two bedroom, one bathroom, art deco apartment with no car parking which was quoted at $800,000 to $860,000 prior to auction. The property sold for $1,011,000 which was significantly higher than the last two bedroom sale in the block which occurred in November 2020 for $730,000. I have not previously seen a ‘company share’ titled property sold with so many bidders, many are usually sold via private treaty due to the lack of buyers able/willing to purchase them.
Have a great week.
Kim Easterbrook
There were 182 auctions reported to the REIV over the weekend resulting in a clearance rate of 96%. 88 properties sold at auction, 86 before auction with 246 auctions being postponed. In addition, there were 154 private sales.
Some welcoming news with the Victorian Premier last week announcing private, one on one property inspections could recommence starting last Saturday. This means one selling agent is permitted to show a property to one household as long as the vendor/tenant are not home and the agent waits outside. A difficult job for selling agents who in some cases have to stand on the door of the property for days on end showing many buyers through but a great start to reopening our industry.
The road map also revealed that outdoor auctions will be permitted for upto 50 fully vaccinated people when 70% of 16+ are fully vaccinated. At this stage it also suggests that marketing and staging of properties are not allowed until this point which will make things difficult for new listings to hit the market. It is my understanding the REIV are trying to obtain some clarification around this. When 80% of 16+ are fully vaccinated, open for inspections and large outdoor auctions will be allowed but only fully vaccinated buyers can attend.
Many land sites have been selling under strong competition with 9 Butler Street, Brighton another example of this. The 585 sqm new home site went to auction over the weekend selling for $3,757,000 which was $507,000 over reserve.
Have a great week.
Kim Easterbrook
There were 192 auctions held over the weekend with 93% selling under the hammer. 121 sold at auction, 57 before auction, 139 postponed and in addition there were 102 private sales reported. I expect this number to start rising over the next few weeks.
One on one private inspections of ‘unoccupied’ properties are now permitted but the first week did not start without a lot of confusion over what could and could not occur. There were reports of vendors moving out of properties due to the confusion in regards to what a ‘vacant’ property was. After clarification, it simply meant the tenant or vendor were not permitted to be at the property during the time of the inspections.
Many sales campaigns were thrown into chaos when the construction industry was shut down for two weeks. The shut down has resulted in delays in many sales campaigns as works such as painting, carpets and other activities that may need to occur to get a property sale ready are not permitted to be carried out. In addition to this, the roadmap suggested that photographers and stylists were not permitted into properties until end of October however this was changed mid week and now is a permittable activity.
To add further confusion, selling agents are not permitted to go into property to conduct appraisals yet property valuations can take place. There are still a lot of inconsistencies in the rulings which hopefully will all be ironed out over the next few weeks. That being said, we are all very grateful that the real estate industry can somewhat operate, even if the opening was somewhat bumpy.
56 Duke Street, Windsor sold on the weekend with nine registered bidders and five participating in the online auction. The property which is in need of renovation sold for $1,025,000 which was $79,000 above the advertised price. The online auction of 5/20 Mary Street, Kew was also well contested with 7 registered bidders. The property sold for $682,000 which was well above the $550,000 to $600,000 price range.
Have a great week.
Kim Easterbrook
Hi ,
There were 151 auctions reported over the weekend resulting in a 95% clearance rate. 80 sold at auction, 64 before auction and 262 were postponed. There were additional 114 private sales.
More buyers seem to becoming more comfortable buying properties sight unseen with a considerable rise in agents offering virtual tours of properties and then surprisingly, the properties being sold within days after with competition from multiple buyers. Most of the auctions that were held and sold over the weekend likely would have been for properties that had not been inspected in person. Vendors and selling agents are walking buyers through via Zoom and Facetime with purchasers having the ability to ask questions directly to the vendor and also having the ability to request to see specific parts of the property. I attended six virtual inspections on Saturday and felt they all worked very well with also having the additional bonus of having direct access to the vendor to ask specific questions. Of course, not as good as viewing them in person but unfortunately this is the best we all can do at present.
Obviously there are some risks with buying a property this way but some buyers are tired of waiting and others have sold their homes and need to find somewhere to live. On the flip side of this, some vendors have purchased properties and need to sell whilst other vendors are keen to keep things moving along and not have to wait until the news about private inspections. Building inspections of properties are permitted which assists in conducting the appropriate due diligence prior to purchasing.
Restrictions eased in regional Victoria last week which allows upto 10 people to view a property at any one time (1 per 4 sqm rule applies). Even though onsite auctions are now allowed, some are still being conducted online due to the demand from Melbourne buyers who are unable to attend the auctions.
Many properties that did go through to auction over the weekend sold well with multiple bidders. The auction of 12 Shenfield Avenue, Bonbeach had 12 registered bidders. As this is a land site the risk of purchasing site unseen is considerably less. However, buyers who lived outside of 5 km of the property would need to rely on google maps and street view to view the surrounding areas. The property sold for $1,950,000 which was $250,000 above the reserve.
22 Euston Street, Malvern was another property that sold extremely well at auction. 505 sqm, with no herage overlay and no value in the house. The new home site sold for a huge $545,000 above the reserve price for $2,415,000.
We are eagerly awaiting the announcement this week in relation to when private inspections of unoccupied properties will be permitted. The premier has indicated this will be when 70% of the eligible population have had their first vaccination. Some clarification is needed as to what an ‘unoccupied’ property actually is. After lockdown 2 last year, one on one inspections were allowed on all properties being vacant or occupied however the vendor/tenant of an occupied property were not allowed to be home, and were only able to leave for one of the four reasons to leave home. We should know more in the coming days.
Have a great week.
Kim Easterbrook
