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Melbourne Property Market Weekly Update

Aug 13, 2012 | Latest News, Melbourne Market

A significant lift in Home Loans – Is this an indication of Property Market Recovery?

Turnover once again is dragging its feet with less than 800 properties sold throughout the week. The clearance rate once again is trending below 60 per cent – coming in at 55 per cent – with luxury properties struggling to gain traction in a slow market atmosphere.

Agents are reporting fewer listings however, with buyer activity still middling below that of previous years, it’s unlikely there’ll be any immediate increase in market activity.

Albeit, RPData have released their July report showing a marginal improvement in vendor metrics in comparison to this time last year. This includes selling time, vendor discounting and auction clearance rates.

The ABS also published some positive data, indicating a 1.3% lift in owner occupier home loans and a 4.3% rise in first home buyer commitments. On the investor front, finance commitments were up 4.9% in June counteracting the May fall of 4.5%. Therefore, although the market is still under-performing, there are indications it could return to positive growth once spring kicks in.

Of the auctions we attended over the weekend, only one achieved a result under the hammer. This was partially due to attendance at a number of million dollar plus ‘luxury’ houses which are generally not attracting enough competition to get the ball rolling in a soft auction atmosphere.

Prices ranges in the 400K – 800K bracket are performing well, providing the property attracts the major buyer demographic for the suburb in question. As a case in point, the first result in our ‘Auctions in the Spotlight’ section, demonstrates this perfectly.

Where possible, agents are choosing to sell ‘prior to auction’ not wanting to risk a ‘pass in’ if at all avoidable. As the Grand Final is the traditional ‘kick off’ for Melbourne’s spring market, we don’t expect market activity to increase perceptibly until this time.

Next week the REIV expects approximately 480 auctions.

 

Weekend Clearance Rate Figures

Week Ending Sunday 12th August 2012

Clearance Rate: 55%  
Total Auctions: 462 (49 unreported)  
Sold: 256 Passed in: 206
At auction: 211 Vendor Bid: 120
Before auction: 44 Real bid: 86
After auction: 1    
Total Private Sales: 503  
Weekly Turnover: 759  
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.

 

Weekend Clearance Rate Figures

Week Ending Sunday 12th August 2012

NPB Clearance Rate: 70%  
Total Auctions Reviewed: 33  
Sold: 23 Passed in: 10
Under $600k: 8   2
$600k-$1m: 9   4
$1m+: 8   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 33 properties reviewed by NPB this weekend:

< $600k

Suburb Type Beds Quote Result
Armadale Apartment 1 $350-375k SOLD $375,000
Essendon Apartment 2 $360-390k SOLD $397,500
Ascot Vale Apartment 2 $400k+ PASSED IN
Montmorency Unit 2 $400-440k SOLD $450,000
Sunshine House 3 $400k+ SOLD $485,000
Thornbury Apartment 2 $400-440k SOLD $491,000
Hawthorn East Apartment 2 $450k+ PASSED IN
Preston Townhouse 3 $500-550k SOLD $515,000
Brunswick West House 2 $510-560k PASSED IN
Brunswick East Apartment 2 $520-570k SOLD $566,000
Collingwood Townhouse 2 $550k+ SOLD $585,000
Sold 8
Passed In 3 NPB Clearance Rate 73%
Total 11

$600k – $1m

Suburb Type Beds Quote Result
Prahran Apartment 2 $520-580k SOLD $606,500
Coburg House 3 $590-630k SOLD $674,500
Maidstone House 4 $600-650k PASSED IN
Hawthorn Townhouse 2 $620-680k SOLD $726,000
Abbotsford Townhouse 2 $580k+ SOLD $727,000
Flemington House 3 $660-720k SOLD $736,500
Brunswick House 3 $700-750k PASSED IN
Thornbury House 2 $750-800k SOLD $825,000
Ormond House 3 $750-800k PASSED IN
Bentleigh East Townhouse 3 $780-830k SOLD $840,000
Fitzroy North House 3 $880-930k SOLD $933,000
Burwood House 4 $900-950k PASSED IN
Caulfield South House 4 $900-990k SOLD $995,000
Sold 9
Passed In 4 NPB Clearance Rate 69%
Total 13

$1m+

Suburb Type Beds Quote Result
Kew House 4 $920k+ SOLD $1,030,000
Brunswick House 4 $950-1040k PASSED IN
Box Hill South House 4 $1.2m+ SOLD $1,220,000
Armadale House 3 $1.2-1.3m PASSED IN
Essendon House 3 $1.2-1.32m SOLD $1,355,000
Elwood House 3 $1.35-1.45m SOLD $1,485,000
Camberwell House 4 $1.5m+ PASSED IN
Hawthorn House 4 $2m+ SOLD $2,125,000
Mont Albert House 3 $2.5m+ SOLD $2,810,000
Sold 6
Passed In 3 NPB Clearance Rate 66%
Total 9

Overall

Sold 23
Passed In 10 NPB Clearance Rate 70%
Total 33

AUCTIONS IN THE SPOTLIGHT

8/25 Malmsbury Street, Hawthorn

8/25 Malmsbury Street, Hawthorn

  • Reported by:Catherine Cashmore
  • Agent:Hocking Stuart
  • Quote:Over $620k-680k
  • Crowd:40 people (approx.)
  • Bidders:4
  • On Market:$692,000
  • Result:$726,000

Comment:

This tri level townhouse is a good property to sell in today’s market. It’s offers comparative affordability for the location – however it’s surrounded by million dollar plus real estate. There were in excess of 40 groups attending and no less than 4 bidders competing. The auction opened swiftly with a real bid of $670K. It was hammer and tong from this point onwards and the auctioneer had to pick and choose whose bid to take, as participants clashed when shouting out numbers. The townhouse went on the market at $692K and sold for $726K.

5 Bethela St, Camberwell

5 Bethela St, Camberwell

  • Reported by:Catherine Cashmore
  • Agent:Noel Jones
  • Quote:$1.5Mil+
  • Crowd:20+ people (approx.)
  • Bidders:0
  • On the Market:N/A
  • Result:Passed in on a vendor bid of $1.55Mil

Comment:

You couldn’t fault this house – fully renovated Art Deco 4 bedroom home on 600 sqm of land. Quoted in excess of 1.5Mil. Unsurprisingly, there was a large crowd attending. The location was perfect, and street appeal excellent, however despite the robust turnout, the current market isn’t favouring luxury real estate. The auction opened and closed on a vendor bid of 1.550Mil with a reserve of $1.685Mil

14/18 Mercer Road, Armadale

14/18 Mercer Road, Armadale

  • Reported by:Catherine Cashmore
  • Agent:Biggin Scott
  • Quote:low $600,000
  • Crowd:20 people (approx.)
  • Bidders:2
  • On the Market:N/A
  • Result:Passed in on a genuine bid of $590,000 – reserve $640,000

Comment:

An older style 2 bedroom apartment with off street parking for two cars. The price point of the suburb put this apartment out of reach for most first home buyers, and doesn’t really offer a feasible option for duel income buyers, therefore the major demographic attending this auction were mature couples and investors. For this reason, the auction didn’t really ‘take off’ as expected. Hoping to get over $600K, the auctioneer kicked off proceedings with a vendor bid of $580K. He was about to knock it down, when one bidder deemed to offer him and extra 1K. This spurred another buyer into action who took the level to $585K – however after a bit of tit for tat, the property passed in at $590K.

4 Hume St, Armadale

4 Hume St, Armadale

  • Reported by:Catherine Cashmore
  • Agent:Bennison & Mackinnon
  • Quote:Over 1.6Mil
  • Crowd:60 (approx.)
  • Bidders:1
  • On the Market:N/A
  • Result:Passed in on a genuine bid of $1.655Mil

Comment:

Armadale – beautiful location and luxury ‘stand out’ period master piece, therefore it was no surprise to see in excess of 60 people attending. The auctioneer didn’t need to convince the crowd of the homes credentials – many were neighbours and few were there to bid. Quoted in excess of 1.6Mil, the auctioneer opened on a vendor bid of 1.6Mil. He tried for some ten mins to inspire the crowd into action before offering a second vendor bid of 1.65Mil. Finally one bidder came forward to offer an extra 5K – after which the property passed in for negotiation at 1.655Mil. It sold some time later for an undisclosed price.

6/108 Cambridge Street, Collingwood

6/108 Cambridge Street, Collingwood

  • Reported by:Robert Di Vita
  • Agent:Peter Markovic
  • Quote:$550,000+
  • Crowd:25 (approx.)
  • Bidders:2
  • On the Market:N/A
  • Result:Passed in on a genuine bid of $575,000

Comment:

A modest crowd of approx 25 were in attendance of This factory conversion two storey warehouse apartment in prime collingwood auctioneer Paul markovic kicked off proceedings with a vendor bid of $540k shortly followed by a real bid of $545k finally reaching $570k where the auctioneer paused seeking vendor instructions upon his return he said that the property was not on the market but not too far away from the vendors reserve, eventually passing in for $575k and sold shortly after for $585,000.

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

Antony Bucello and Catherine Cashmore from National Property Buyers

Email Antony
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