I wrote a little last week regarding the REIVs quarterly median statistics which contain revisions that typically occur some 3 months after the figures are initially released and therefore make the press release – accompanied by boom and bust media headlines – somewhat questionable once all results have been collected.
The reason figures are revised, is because all data providers suffer from a lag in reported sales results that typically filter in from the valuer general data – the most authoritative and comprehensive source of ‘settled’ sales information we have – over the 3 month period ‘post’ the quarterly release.
Albeit, at time of release, the raw data often goes hand in hand with somewhat bullish headlines which claim large increases or decreases, which can reduce significantly when the next quarterly bulletin hits the press.
APM have now released their own assessment of quarterly growth for Melbourne which contains similar subsequent corrections on previous releases – items of which are easily missed if you’re not used to digging beneath the headline content of their press release.
As an example, APM’s June’s results are showing Melbourne as the national leader in price growth, with a 5 per cent rise over the quarter, which equates to 6.1 per cent year on year.
However, if you read the fine print, it’s clear the robust increase resulted from a downward revision to their March quarterly statistics of around 2.2 per cent to $527,245. In fact, if you track back taking subsequent revisions into account, Melbourne’s annual price growth would be closer to 4.2 per cent.
So how much can we trust median data? Well essentially, median data is simply the ‘middle’ figure of all cited sales. Individual property prices, and the changes a property may go through in terms of renovation and extension, which would therefore warrant a higher capital price outside of natural increases, is not always represented in the information provided, and it should also be noted, that each provider uses a slightly different methodology when collating their statistics.
Notwithstanding, as mentioned above, the most reliable data we have, comes direct from valuer general which captures all settled property sales across Victoria with the one significant drawback – the time it takes to receive this information.
Only a market appraisal or valuation, taking into account essentials such as location, type, feel and the micro market for any said suburb, can provide this information. Albeit, it gives a broad indicator of the ‘trend’ in movements – and through the course of 2012, it’s clear interest rate drops and other stimulants incorporated to ‘boost’ confidence were not having an impact.
In this respect, when assessing Melbourne’s property market from the ground, it’s clear there’s been an improvement year to date – it’s one that’s been felt in most states – barring perhaps Adelaide and Canberra.
The recovery is largely led by investors and up-graders – the number of owner occupier housing commitments is up 15.1 per cent year on year, and as mentioned, it’s investors who are playing a far bigger contribution to price rises in Australia’s real estate market, with 36 per cent of loans going to this sector alone, and all states experiencing a rush to the perceived safe haven of bricks and mortar.
Year on year, Victoria’s investor numbers are up 11.3 per cent – This is also evident in the pace at which Australian buyers are fixing their mortgages – agreements of which comprised of 19.1 per cent of new mortgages in May after reaching 20.6 per cent in April.
Notwithstanding – It could be argued, that we haven’t even started to see the full impact of an investor lead surge towards real estate. As reported this week from the “new SMSF Professional’s Association of Australia and Macquarie Bank” according to the ATO, between 2006 and 2013, SMSF property assets grew in value by 230 per cent – ‘a higher growth rate than any other asset class.’ And, it’s the baby boomer generation aged 55 and over that are leading the way, highlighting our demographic headwind as the tsunami of retirees create expected significant craters in future government expenditure.
This type of activity is pinned on confidence – and it’s yet to be assessed if the forthcoming Federal election will create any significant impact. Albeit, as it currently stands, agents in the inner and middle ring suburbs of Melbourne are reporting stock levels which are not keeping up with buyer demand.
Catherine Cashmore
| Clearance Rate: | 71% | ||
| Total Auctions: | 506 (36 unreported) | ||
| Sold: | 358 | Passed in: | 148 |
| At auction: | 287 | Vendor Bid: | 97 |
| Before auction: | 69 | Real bid: | 51 |
| After auction: | 2 | ||
| Total Private Sales: | 456 | ||
| Weekly Turnover: | 814 | ||
| Source: www.reiv.com.au | |||
The NPB clearance rate is representative of the results evidenced in the ‘quality’ end of the marketplace. We take the results from a range of suburbs; however please note we are not ‘suburb specific’. NPB Melbourne, negotiate on hundreds of properties for their clients each year throughout all areas of Melbourne and the Bellarine Peninsula. The properties we highlight are taken from a selection which we carefully analyse for quality assessment and revise daily.
NPB’s clearance rate moving in line with REIV data – however it should be noted, the quality and quantity of ‘good’ listings are slowly reducing as we approach winter and it’s expected this could increase competition.
| NPB Clearance Rate: | 87% | ||
| Total Auctions Reviewed: | 49 | ||
| Sold: | 43 | Passed in: | 6 |
| Under $600k: | 15 | 3 | |
| $600k-$1m: | 19 | 2 | |
| $1m+: | 9 | 10 | |
Why is the NPB Clearance Rate always higher than the REIV Clearance Rate?
The NPB clearance rate is a snapshot of ‘investment grade’ or ‘cream of the crop’ properties representing only those we recommend to clients. These are properties that hold the best potential for a long term capital growth and rental demand. Whilst the Real Estate Institute of Victoria include all properties scheduled for auction (as reported by their members) – including those that are poorly located and unlikely to attract demand even in a robust climate; our clearance rate is far more representative of the market that represents our client’s best interests. It’s an important part of how we assess the best negotiation strategy for your needs.
The full list of the 49 properties reviewed by NPB this weekend:
| Suburb | Type | Beds | Quote | Result |
| Fitzroy North | Apartment | 1 | $290-320k | SOLD $363,000 |
| St Kilda | Apartment | 1 | $310-330k | PASSED IN |
| Thornbury | Apartment | 2 | $340-$370k | SOLD $432,000 |
| Essendon | Apartment | 2 | $370-410k | SOLD $397,500 |
| North Melbourne | Apartment | 1 | $380-410k | SOLD $415,000 |
| St Kilda East | Apartment | 2 | $440-470k | SOLD $495,000 |
| Glen Huntly | Unit | 2 | $440-480k | SOLD $505,500 |
| Camberwell | Apartment | 2 | $450k+ | SOLD $521,000 |
| St Kilda West | Apartment | 2 | $460-490k | SOLD $522,000 |
| Thornbury | Unit | 2 | $420-450k | SOLD $535,000 |
| Reservoir | House | 3 | $430-470k | SOLD $539,500 |
| Balwyn | Apartment | 2 | $400-440k | SOLD $540,000 |
| Hawthorn | Apartment | 2 | $450k+ | SOLD $540,000 |
| Greensborough | House | 3 | $470-520k | PASSED IN |
| Balwyn North | Unit | 2 | $480-530k | SOLD $563,000 |
| Preston | House | 3 | $470k+ | SOLD $575,000 |
| Balwyn North | Unit | 2 | $450-490k | SOLD $592,000 |
| Northcote | Apartment | 2 | $500-550k | PASSED IN |
| Sold | 15 | |||
| Passed In | 3 | NPB Clearance Rate 83% | ||
| Total | 18 | |||
| Suburb | Type | Beds | Quote | Result |
| Reservoir | House | 2 | $590k+ | SOLD $602,500 |
| Fitzroy | Apartment | 2 | $530-580k | SOLD $625,000 |
| Murrumbeena | Townhouse | 2 | $480k+ | SOLD $628,000 |
| Prahran | Apartment | 2 | $580-630k | SOLD $633,000 |
| Richmond | House | 2 | $550k+ | SOLD $650,000 |
| Mont Albert | Unit | 2 | $600-650k | SOLD $650,000 |
| Ivanhoe | Unit | 2 | $570-610k | SOLD $665,000 |
| Fitzroy North | House | 2 | $590-650k | SOLD $675,000 |
| Glen Iris | Unit | 3 | $580k+ | SOLD $690,000 |
| Richmond | Apartment | 2 | $550k+ | SOLD $699,500 |
| Kensington | House | 2 | $620-670k | SOLD $701,000 |
| Vermont South | House | 4 | $650k+ | SOLD $786,000 |
| Richmond | Townhouse | 3 | $680-720k | SOLD $817,500 |
| Collingwood | House | 2 | $725-775k | PASSED IN |
| Abbotsford | Townhouse | 3 | $780-850k | SOLD $850,000 |
| Northcote | House | 3 | $850k+ | SOLD $875,000 |
| Collingwood | Warehouse | 3 | $700-770k | SOLD $925,000 |
| Collingwood | Townhouse | 3 | $800-850k | PASSED IN |
| Port Melbourne | House | 2 | $850k+ | SOLD $950,000 |
| Fairfield | House | 3 | $800-880k | SOLD $995,000 |
| Port Melbourne | Townhouse | 3 | $900k+ | SOLD $995,000 |
| Sold | 19 | |||
| Passed In | 2 | NPB Clearance Rate 90% | ||
| Total | 21 | |||
| Suburb | Type | Beds | Quote | Result |
| Brunswick East | House | 4 | $1-1.1m | SOLD $1,215,000 |
| Box Hill | House | 4 | $900k+ | SOLD $1,230,000 |
| Essendon | House | 3 | $1.2m+ | PASSED IN |
| South Morang | House | 5 | $1-1.1m | SOLD $1,360,000 |
| St Kilda West | House | 3 | $1m+ | SOLD $1,404,000 |
| Richmond | Townhouse | 3 | $1.2m+ | SOLD $1,410,000 |
| Caulfield North | House | 4 | $1.2-1.32m | SOLD $1,420,000 |
| Glen Iris | House | 3 | $1.05-1.15m | SOLD $1,550,000 |
| Middle Park | House | 4 | $2.7m+ | SOLD $3,055,000 |
| Kew | House | 6 | $3m+ | SOLD $3,362,000 |
| Sold | 9 | |||
| Passed In | 1 | NPB Clearance Rate 90% | ||
| Total | 10 | |||
| Sold | 43 | |||
| Passed In | 6 | NPB Clearance Rate 87% | ||
| Total | 49 | |||
AUCTIONS IN THE SPOTLIGHT
4/26 Dundas Street Thornbury
CONTACT US
If you need any assistance with searching, assessing or negotiating your next property purchase or simply wish to discuss your property buying needs, please don’t hesitate to contact us. Alternatively, you can complete our online Help Us Help You form and we will contact you.
Regards
Antony Bucello and Catherine Cashmore
Comment:
This well presented apartment attracted good competition on Saturday with 5 active bidders.
Opening with a genuine bid of $340,000 the auction progressed quickly to meet the reserve of $380,000.
Heated competition continued post $400,000 and selling for $432,000, the property achieved a price $62,000 above reserve.