Some standout results in a steady market atmosphere…
by Antony Bucello & Catherine Cashmore
If the interest rates had inspired prospective buyers to head out shopping this weekend, the rain put a dampener on any marked enthusiasm. Albeit, there were a few stand out results that raised eyebrows – one auction we attended attracted 6 bidders and sold $175,000 above reserve. Situated in a coveted pocket of Ivanhoe with plenty of period appeal, it was no surprise to see emotional bidding which pushed the result into a ‘boom market’ price range (see ‘Auctions in the Spotlight’ for further details.)
This was the trend across all inner city suburbs. Properties with ‘standout’ attributes, which appeal to the major buyer demographic in the area, are performing consistently and not representing the general malaise lingering over the rest of the metro market. For example, 7/29B Hampden Road, Armadale, – a 2 bedroom apartment abundant with period detail with a quote of $590,000-$640,000 managed to attract strong bidding and sell for $737,000. It was another stand out result defying the overall trend represented in a 61 per cent year to date clearance rate.
However in view of the reality that only marginal rate drops are being passed on from our major four institutions (with a few still delaying announcement), the savings to the average mortgage holder ($600,000 and below) may provide a few dollars additional disposable income, but it’s unlikely to influence in the market in the short term. It historically takes weeks not days for rate drops to show themselves in median data.
Greater influences are issues of job security and the recent announcement by the RBA indicating the economy is weaker than initially predicted. Confidence is the biggest influence of growth in any market based on the fundamentals of tight supply and consistent demand. Therefore, if you’re looking towards a change in sentiment, it would perhaps be more apt to look at the polls rather than the cash rate.
Results so far this year are remarkably consistent as the 62 per cent clearance rate proves. It further emphasises that we’ve reached the bottom of the property cycle and in some suburbs, prices are starting to show hints of growth. However even though I don’t expect any great movement in the short-term, there’s a feeling of optimism across the industry that the news of more prospected interest rate drops may inspire those who have been sitting on the sidelines, to make a decisive move.
| Clearance Rate: | 62% | ||
| Total Auctions: | 592 | ||
| Sold: | 368 | Passed in: | 224 |
| At auction: | 297 | Vendor Bid: | 131 |
| Before auction: | 69 | Real bid: | 93 |
| After auction: | 2 | ||
| Total Private Sales: | 646 | ||
| Source: www.reiv.com.au | |||
The NPB clearance rate is representative of the results evidenced in the ‘quality’ end of the marketplace. The increasing shortage of listings falling under this category, along with the rate drop, which will provide a benefit to most mortgage holders in the upper percentile of sales, is keeping the clearance rate consistently steady. As we mentioned a couple of weeks ago – we expect this trend to continue as we move into the winter months, during which stock levels seasonally drop to their lowest levels.
| NPB Clearance Rate: | 77% | ||
| Total Auctions Reviewed: | 39 | ||
| Sold: | 30 | Passed in: | 9 |
| Under $600k+: | 10 | 2 | |
| $600k-$1m: | 10 | 3 | |
| $1m+: | 10 | 4 | |
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 39 properties reviewed by NPB this weekend:
| Suburb | Type | Beds | Quote | Result |
| Richmond | Apartment | 1 | $400k+ | SOLD $440,000 |
| Hawthorn | Apartment | 2 | $400-440k | Passed In |
| Burwood | Unit | 3 | $440-480k | SOLD $460,000 |
| St Kilda | Apartment | 2 | $400-440k | SOLD $467,750 |
| Northcote | House | 2 | $470-510k | SOLD $507,500 |
| Croydon | House | 3 | $450-500k | SOLD $522,000 |
| Coburg | House | 2 | $460-510k | SOLD $565,000 |
| Ivanhoe | Unit | 2 | $470-510k | Passed In |
| Elwood | Apartment | 2 | $510-550k | SOLD $568,000 |
| Footscray | House | 3 | $450-500k | SOLD $570,000 |
| West Footscray | House | 3 | $530-580k | SOLD $585,000 |
| Cheltenham | House | 4 | $530-580k | SOLD $589,000 |
| Sold | 10 | |||
| Passed In | 2 | NPB Clearance Rate 83% | ||
| Total | 12 | |||
| Suburb | Type | Beds | Quote | Result |
| Glen Iris | House | 2 | $600-650k | SOLD $715,000 |
| Templestowe Lower | Townhouse | 3 | $690k+ | SOLD $735,000 |
| Armadale | Apartment | 2 | $590-640k | SOLD $737,000 |
| Doncaster | Townhouse | 3 | $650-710k | Passed In |
| Collingwood | Townhouse | 3 | $710-760k | SOLD $800,000 |
| Richmond | House | 2 | $650-690k | SOLD $801,000 |
| Bentleigh | House | 3 | $750-820k | SOLD $864,000 |
| Abbotsford | Townhouse | 3 | $800k+ | SOLD $906,000 |
| Brunswick | House | 4 | $800-880k | Passed In |
| Box Hill North | House | 4 | $830-870k | Passed In |
| Port Melbourne | House | 2 | $850-900k | SOLD $925,000 |
| St Kilda East | House | 3 | $810-890k | SOLD $940,000 |
| St Kilda | House | 3 | $870-930k | SOLD $950,000 |
| Sold | 10 | |||
| Passed In | 3 | NPB Clearance Rate 77% | ||
| Total | 13 | |||
| Suburb | Type | Beds | Quote | Result |
| Elwood | Apartment | 3 | $900-990k | SOLD $1,030,000 |
| Brighton East | House | 3 | $1-1.1m | Passed In |
| Caulfield | House | 4 | $1.1-1.2m | Passed In |
| Middle Park | House | 3 | $1-1.1m | SOLD $1,127,500 |
| Brighton | House | 3 | $890-990k | SOLD $1,157,000 |
| Caulfield | House | 3 | $950-1050k | SOLD $1,265,000 |
| Balwyn | House | 5 | $1.25-1.35m | Passed In |
| Hampton | House | 4 | $1.4-1.5m | SOLD $1,535,000 |
| Richmond | House | 4 | $1.5m+ | SOLD $1,600,000 |
| Fitzroy North | House | 3 | $1.25-1.37m | SOLD $1,611,000 |
| Ivanhoe | House | 4 | $1.45-1.55m | SOLD $1,735,000 |
| Hawthorn East | House | 4 | $1.8-2m | Passed In |
| Camberwell | House | 4 | $2.5-3m | SOLD $3,425,000 |
| Malvern | House | 5 | $3.8-4m | SOLD $4,865,000 |
| Sold | 10 | |||
| Passed In | 4 | NPB Clearance Rate 71% | ||
| Total | 14 | |||
| Sold | 30 | |||
| Passed In | 9 | NPB Clearance Rate 77% | ||
| Total | 39 | |||
AUCTIONS IN THE SPOTLIGHT
10 Kent Av, Brighton
11 Carn Ave, Ivanhoe
Comment:
This was a stunning 4 bedroom 2 bathroom Edwardian. Quoted at 1.45-1.55 mil there were a sea of umbrellas outside the auction as well over 80 people gathered to watch. A surprising number showed interest with 6 bidders raising a hand. The auction opened on a real bid of 1.4Mil. Bidding was strong throughout and despite some buyers trying to break the increments down, the winning bidder held out with 10k jumps. Announced on the market at 1.56Mil the property finally sold over 100K above reserve for 1.735Mil. A very strong result.
37 Snowdon Ave Caulfield
Comment:
37 Snowdon Ave Caulfield featured a basic 3 bedroom house on a large block of land measuring over 800 sqm. Opportunity to develop the land was ripe, however the bidders weren’t forthcoming. Opening on a vendor bid of 1.2Mil, a crowd of around 20 showed little interest and the home passed in.
21 Lawson St, Hawthorn East
Comment:
A crowd of around 65 attended this auction of this 4 bedroom Californian bungalow renovated with panache including a swimming pool in the back yard. Proceedings kicked off with a vendor bid of 1.8Mil, this was followed with one genuine bid of 1.825Mil, before the home passed in for negotiation.
1/8 Balmoral Ave, Templestowe Lower
Comment:
Quoted at 690K plus, this front of 3, 3 bedroom 2 bathroom townhouse attracted a crowd of around 50 people. It was a non referral auction, therefore the auctioneer had to make 3 vendor bids ($690K, 700K, 710K,) before 3 bidders decided to step in. However it didn’t get far before interest was burnt out. Passing in at 724K it sold via negotiation for $735,000
142 Buckley St, Essendon
Comment:
This 4 bedroom renovated grand Federation family home was somewhat compromised by its position on a busy road. However, around 40 people turned out in the rain to attend the auction. Opening on a vendor bid of $1.15Mil, the auctioneer asked for increments of 10K. With only one bidder showing interest and with no further bidding the property passed in for $1.16Mil. The home is now listed for private sale with an undisclosed price.
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:
A grand French Provincial house located a short distance from the bay. 4 bedrooms, 4 bathrooms and room for 5 cars in the basement garage. The crowd was around 40, and due to the weather the auction was held inside. Opening on a vendor bid of 3.25Mil, the auctioneer asked for increments of 100K, however only got a 10K K bid taking the price to 3.26Mil. He eventually got a second bid of 3.3Mil before the property passed in for negotiation.