Fewer Listings, Fewer Auctions, what does this mean for our property market?
by Antony Bucello & Catherine Cashmore
As is typically the case in winter, there are a reduced number of auctions occurring each week and the trend is unlikely to pick up until we get closer to spring. Along with this, we’re seeing fewer listings – translating into less choice for buyers and subsequently greater competition around properties that represent the ‘best of their type’.
NPB attended 5 auctions yesterday all of which sold ‘under the hammer’; however as specified above, each qualified highly on the following three points
- They were all well positioned
- They all represented the ‘best of their type’ from options currently on the market
and - All were priced appropriately for market sentiment.
Considering the auctions we’re assessing typically sell on the day, it’s clear from the REIV’s overall 55 per cent clearance rate this week, that properties not attracting enough competition to sell under the hammer generally fall into one of two camps;
- A proportion of vendor’s still have expectations outside market conditions,
and - The current ‘buyer’ market feel under no pressure to settle for ‘subpar’ properties whilst the market is predominately flat.
Of course, market sentiment has reduced the number of active buyers; however it has had no impact on the ‘good’ properties we’re monitoring which fit neatly into the criteria outlined above. It simply emphasizes the point that – to make money in both a flat and rising market – you need to purchase wisely to begin with.
Results from the census reveal an interesting change in the levels of home ownership. The outstanding and unprecedented capital growth Melbourne experienced prior to the GFC, have seen us evolve from a city where most own their homes ‘outright,’ into a city where most hold debt against their properties.
It’s therefore understandable that the dynamics of our buyer market are changing and in the light of this, a period of price stability should also be looked upon as a period of ‘opportunity’ for those wise enough to capitalise on current conditions.
| Clearance Rate: | 55% | ||
| Total Auctions: | 331 | ||
| Sold: | 182 | Passed in: | 149 |
| At auction: | 147 | Vendor Bid: | 95 |
| Before auction: | 32 | Real bid: | 54 |
| After auction: | 3 | ||
| Total Private Sales: | 555 | ||
| Total Weekly Turnover: | 737 | ||
| 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.
| NPB Clearance Rate: | 76% | ||
| Total Auctions Reviewed: | 33 | ||
| Sold: | 25 | Passed in: | 8 |
| Under $600k: | 10 | 3 | |
| $600k-$1m: | 10 | 2 | |
| $1m+: | 5 | 3 | |
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 34 properties reviewed by NPB this weekend:
| Suburb | Type | Beds | Quote | Result |
| Reservoir | Unit | 2 | $300-330k | SOLD $331,250 |
| Frankston | House | 3 | $320-350k | PASSED IN |
| Doncaster East | Unit | 2 | $370-400k | SOLD $406,500 |
| Mooroolbark | House | 3 | $360-390k | SOLD $425,000 |
| Elwood | Apartment | 1 | $350-380k | SOLD $437,000 |
| Macleod | House | 3 | $400-440k | PASSED IN |
| Coburg North | Unit | 2 | $400-440k | SOLD $440,000 |
| Ringwood | House | 2 | $400-440k | SOLD $446,000 |
| Box Hill | Unit | 2 | $420-450k | PASSED IN |
| Altona | Unit | 3 | $500-550k | SOLD $555,000 |
| Kensington | House | 2 | $500-550k | SOLD $559,000 |
| Carnegie | Unit | 3 | $500-550k | SOLD $571,000 |
| Parkdale | Unit | 2 | $550-580k | SOLD $583,500 |
| Sold | 10 | |||
| Passed In | 3 | NPB Clearance Rate 77% | ||
| Total | 13 | |||
| Suburb | Type | Beds | Quote | Result |
| Burwood East | House | 3 | $550-600k | SOLD $626,000 |
| Elwood | Apartment | 2 | $590-640k | SOLD $627,500 |
| St Kilda East | House | 3 | $600-650k | SOLD $631,000 |
| Port Melbourne | House | 2 | $525-575k | SOLD $642,000 |
| Balwyn North | Unit | 2 | $590-640k | SOLD $642,000 |
| Brunswick West | House | 3 | $600-660k | SOLD $668,000 |
| Williamstown | Unit | 3 | $630-670k | SOLD $675,000 |
| Thornbury | House | 2 | $650-700k | SOLD $750,000 |
| South Yarra | House | 2 | $640-690k | SOLD $795,000 |
| South Melbourne | House | 2 | $670-720k | PASSED IN |
| Richmond | House | 3 | $800-880k | PASSED IN |
| Bentleigh | House | 3 | $850k+ | SOLD $986,000 |
| Sold | 10 | |||
| Passed In | 2 | NPB Clearance Rate 83% | ||
| Total | 12 | |||
| Suburb | Type | Beds | Quote | Result |
| Port Melbourne | House | 2 | $1-1.1m | PASSED IN |
| Essendon | House | 4 | $1-1.1m | SOLD $1,125,000 |
| Brighton East | Townhouse | 4 | $1.1-1.2m | SOLD $1,270,000 |
| Kew | House | 4 | $1.2m+ | PASSED IN |
| Middle Park | House | 3 | $1.1-1.2m | SOLD $1,281,000 |
| Mount Waverley | House | 5 | $1.4-1.5m | SOLD $1,532,000 |
| Sandringham | House | 4 | $1.5m+ | PASSED IN |
| Toorak | House | 5 | $2-2.2m | SOLD $2,200,000 |
| Sold | 5 | |||
| Passed In | 3 | NPB Clearance Rate 63% | ||
| Total | 8 | |||
| Sold | 25 | |||
| Passed In | 8 | NPB Clearance Rate 76% | ||
| Total | 33 | |||
AUCTIONS IN THE SPOTLIGHT
6/24A Tennyson St, Elwood
34A Emily Street, Carnegie
Comment:
2 bedroom villa unit – well located – quoting low $500K. Auction opened on a vendor bid of $500K – however with a crowd of around 75, it didn’t take long before there was some aggressive bidding from 4 parties. The property went on the market at $550K and sold under the hammer at $572K.
3/58 Moonya Road, Carnegie
Comment:
A well located 3 bedroom villa unit on a block of only 3 – the auction opened on a genuine bid of $400K, however this was swiftly followed by a vendor bid of $500K. Thereafter 2 bidders competed – although the bidding was slow and cautious. At $550K, the property was placed on the market and finally sold under the hammer for $555K.
1/23 Pine Avenue, Elwood
Comment:
The auction opened on a vendor bid of $580K, however only two rather ‘reluctant’ bidders showed interest. The price managed to inch past $600K, and at $625K it was announced ‘on market.’ The apartment finally sold under the hammer for $627,500
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 Spacious 1 bedder – renovated inside, perfect for the first home buyer or investor. Opening on a genuine bid of $300K – in no time at all it had reached its reserve of $380K. Topping $400K – and with two buyers still competing – it soon peaked $430K finally selling for $437K.