Property market currently in a phase of un-changeable stability…
by Antony Bucello & Catherine Cashmore
If you’ve been following the budget and numerous political highlights over the past few weeks and find yourself growing tired of fluctuating insecurity over interest rate movements and unemployment figures, then take a break and look towards the property market because it’s currently in a phase of un-changeable stability.
The clearance rate is now trending above that of last year, but the movements from one week to the next are marginal at best. Last weeks clearance rate of 62 per cent was revised to 61 per cent. This week’s clearance rate of 63 per cent is a strong result however; with 63 results yet to be reported, it may also drop mid-week.
The number of unreported results rises during a flat climate because more properties sell via negotiation than ‘under the hammer.’ Once un-reported results are collected, they go into making up the midweek revised figure. Although it’s frustrating to have a high number of un-reported results pending, agents are allowed to report properties as ‘sold at auction’ as long as auction conditions (no 3 day cooling) are applicable to the sale. Therefore late results coming in indicate the level of ‘behind closed doors’ activity occurring.
Such a climate is ideal from a buyer perspective. Under a heated auction atmosphere there is rarely a chance to take a step back and discuss budget decisions with a partner or take time out to ‘think’. A sale by negotiation allows this to happen.
The lowering un-employment rate in Victoria from 5.8 to 5.3 should be welcomed. However it should also be noted that the number has been patched up with an increase in part time work and fall in full employment. Therefore, it’s unlikely to play a part in the property market other than perhaps increase overall confidence in the economy.
The interest rate drop partially passed on from all four major banks, has helped free up disposable income and allows greater borrowing power from buyers wanting to take this option. However rates that go down below the long-term average also go up therefore it’s expected that buyers will remain cautious.
Perhaps the one dynamic factor that may bear effect on forthcoming results is the gradual drop in stock levels in the more popular suburban locations. It’s seasonal in winter to see lower stock levels, however considering there was record high stock last winter hampering the market for vendors, to see a reduction may entice competition at auctions resulting in greater numbers selling under the hammer and a possible rise in the metro median.
For the time being, power is still largely in buyer’s hands and the market broadly represents a level playing field.
| Clearance Rate: | 63% | ||
| Total Auctions: | 591 | ||
| Sold: | 370 | Passed in: | 221 |
| At auction: | 302 | Vendor Bid: | 135 |
| Before auction: | 67 | Real bid: | 86 |
| After auction: | 1 | ||
| Total Private Sales: | 564 | ||
| Total Sales: | 934 | ||
| Source: www.reiv.com.au | |||
The NPB clearance rate falls broadly in line with the REIV figures this week showing a rise in last week’s numbers. There is a growing shortage of quality stock with strong results evidencing themselves particularly in the inner northern suburbs. Those wanting to purchase this year would be wise to step in before prices start reflecting this trend. This is particularly applicable if your budget falls between $400,000 – $800,000. This is where the bulk of buyer demand remains.
| NPB Clearance Rate: | 76% | ||
| Total Auctions Reviewed: | 42 | ||
| Sold: | 32 | Passed in: | 10 |
| Under $600k: | 12 | 3 | |
| $600k-$1m: | 11 | 2 | |
| $1m+: | 9 | 5 | |
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 40 properties reviewed by NPB this weekend:
| Suburb | Type | Beds | Quote | Result |
| Brunswick West | Apartment | 2 | $330-360k | SOLD $345,000 |
| South Yarra | Apartment | 1 | $340-375k | SOLD $379,000 |
| Williamstown | Apartment | 2 | $380-410k | SOLD $408,000 |
| Box Hill | Unit | 2 | $390k+ | SOLD $438,000 |
| Hampton East | Unit | 2 | $380-415k | PASSED IN |
| Sandringham | Unit | 2 | $390-430k | SOLD $440,500 |
| Ferntree Gully | House | 4 | $420-450k | SOLD $460,000 |
| St Kilda East | Apartment | 2 | $400-440k | SOLD $477,000 |
| Donvale | Townhouse | 3 | $480k+ | SOLD $500,000 |
| Hawthorn East | Apartment | 2 | $440-480k | SOLD $506,000 |
| Preston | Townhouse | 3 | $440-495k | SOLD $531,000 |
| Elsternwick | Unit | 2 | $470-520k | PASSED IN |
| South Melbourne | Apartment | 2 | $500-550k | SOLD $550,000 |
| Surrey Hills | Unit | 2 | $500-550k | PASSED IN |
| Sold | 12 | |||
| Passed In | 3 | NPB Clearance Rate 80% | ||
| Total | 15 | |||
| Suburb | Type | Beds | Quote | Result |
| Macleod | Townhouse | 3 | $550k+ | PASSED IN |
| Collingwood | Apartment | 2 | $560-600k | SOLD $588,800 |
| Elwood | Apartment | 2 | $550-590k | SOLD $607,500 |
| West Footscray | House | 3 | $490-540k | SOLD $610,000 |
| Niddrie | House | 3 | $540-590k | SOLD $615,000 |
| Doncaster | House | 3 | $570k+ | SOLD $649,000 |
| Mordialloc | Townhouse | 3 | $590-640k | PASSED IN |
| Balwyn | Townhouse | 2 | $630-690k | SOLD $657,500 |
| Elwood | Apartment | 3 | $670-730k | SOLD $744,000 |
| Alphington | House | 3 | $675-725k | SOLD $770,000 |
| Northcote | House | 3 | $680-730k | SOLD $785,000 |
| Preston | House | 3 | $690-750k | SOLD $815,000 |
| Burwood | House | 3 | $800-870k | SOLD $875,000 |
| Sold | 11 | |||
| Passed In | 2 | NPB Clearance Rate 85% | ||
| Total | 13 | |||
| Suburb | Type | Beds | Quote | Result |
| Glen Iris | House | 3 | $960-1050k | SOLD $1,010,000 |
| Richmond | House | 3 | $900k+ | SOLD $1,020,000 |
| Flemington | House | 3 | $950-1000k | SOLD $1,045,000 |
| Port Melbourne | House | 2 | $1m+ | PASSED IN |
| Ivanhoe East | House | 4 | $1.1-1.2m | SOLD $1,196,000 |
| St Kilda | Apartment | 3 | $1.2-1.3m | SOLD $1,215,000 |
| Brighton | House | 2 | $1.2-1.3m | PASSED IN |
| Kew | Townhouse | 3 | $1.4m+ | PASSED IN |
| Northcote | House | 4 | $1.4-1.5m | PASSED IN |
| Camberwell | House | 3 | $1.6-1.7m | PASSED IN |
| Clifton Hill | House | 3 | $2.2-2.3m | SOLD $2,520,000 |
| Camberwell | House | 4 | $2.5m+ | SOLD $2,813,000 |
| Princes Hill | House | 3 | $3.2-3.5m | SOLD $3,820,000 |
| Canterbury | House | 4 | $3.5m+ | SOLD $3,820,000 |
| Sold | 9 | |||
| Passed In | 5 | NPB Clearance Rate 64% | ||
| Total | 14 | |||
| Sold | 32 | |||
| Passed In | 10 | NPB Clearance Rate 76% | ||
| Total | 42 | |||
AUCTIONS IN THE SPOTLIGHT
36 Murray Rd, McKinnon
102 Head St, Brighton
Comment:
A healthy number of watchers attended the auction for this 4 bedroom 2 bathroom renovated period property. Like the other auctions I witnessed most had arms crossed or hands stuffed in pockets. No opening bid was forthcoming, therefore the auctioneer opened on a vendor bid of $1.5mil. Unfortunately, despite the numbers attending the auction never progressed past first base and the property was passed in on a vendor bid of $1,500,000.
9 Abbin Avenue, Bentleigh East
Comment:
Enjoying the free coffee on offer from Buxton’s complementary coffee truck, a crowd of around 50 gathered for the auction of this 4 bedroom renovated home holding high expectations. The Auctioneer opened on a vendor bid of $800,000 and called for an advance of 10k increments. In a splurge of activity, two bidders swiftly took the price to 850k before interest dried up and the home passed in for negotiation. No sale was achieved and the reserve has been recorded at $887,000
8 Dene Avenue, Malvern East
Comment:
Only one bidder chose to get involved for this un-renovated property on a block of land approx. 794 sqm. The auction opened on a vendor bid of $1.2 mil and it took the half time break as well as a lowering of the requested increments from 20k to 10k to get one bidder to raise a hand. The property passed in at $1.21mil for negotiation. The property sold successfully a short while following for an undisclosed amount over $1.25Mil.
60 Clive St, West Footscray
Comment:
The auction for this un-renovated Californian Bungalow was hotly contested. The auction opened on a vendor bid of $490,000 to kick things off and 5 bidders competed for the home. The property reached it’s ‘reserve’ at $550,000 and sold some $60,000 later for $610,000. A strong result.
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 crowd of around 50 attended the auction for this period house nestled in a quiet pocket of McKinnon. The property had been partially updated and being in the McKinnon school zone, provided a good ‘foot through the door’ opportunity for a family with school aged children.
The auctioneer called for an opening bid of 840k, and shortly following got his wish. Requesting increments of 10k, it was a two-horse race for the rest of the auction. At 870k biding increments were broken into 5k jumps. However at 890k the bidding dried up and the property passed in for negotiation later selling for $941,000.