Buyer demand lifting in some suburbs of the city
by Antony Bucello & Catherine Cashmore
Another weekend passes and although there was a lift in the clearance rate, which came in at 61 per cent on a reported 532 auctions, there’s little perceptible difference in the market place from the previous few weeks. An overall figure of 921 properties sold during the week and that indicates that the market is holding up well despite economic data signifying Victoria’s economy is strained.
The large number of unreported results at close of business Saturday (17%) makes it clear plenty of deals are still being sealed behind closed doors. This outlines numbers sold ‘under the hammer’ are marginal compared to other methods of sale, keeping our market firmly a ‘negotiators’ domain.
It’s clear from the numbers attending the auctions and opens that people have an appetite to buy, however what is also abundantly clear is the market is stagnated with a gap between what the majority of buyers are willing – or able – to pay and what vendors are willing to accept. However, this is nothing new in the Victorian residential market place, a vendor not needing to ‘meet the market’ is one of the primary reasons we have a platform under how far prices will drop. Consequently; in some areas, there has been a proportion of listings withdrawn from sale leaving poor quality stock lingering and ‘days on market’ extended.
You’ll often hear that our market is ‘fragmented’ and when looking at the suburb by suburb clearance rates this is indeed evident, with some locations with minimal stock outperforming others where supply is in abundance. Of those where more than 30 sales have been recorded, Elsternwick currently leads the pack with an 83.7% clearance rate on a reported 43 auctions.
Markets run on confidence as well as economic fundamentals, and with little confidence to promote more sales under the hammer and lift the mood, the market remains a negotiators paradise. Having said this, there is always the odd one that stands out from the crowd as you’ll see in our ‘auctions in the spotlight’ section below. In the inner northern suburbs, where stock is extremely tight, we’ve witnessed some strong results. I’d even go so far as to say, in some areas the market has tipped into a ‘sellers domain’. However, for most other areas there’s a longer flatter path ahead.
The REIV amongst others have suggested the only way for the market to pick up would be in the form of a ‘stimulus’ such as a drop in rates. However whilst the cost of long-term wholesale debt continues to challenge bank’s profit margins, we need to face the reality that this is unlikely to happen. It’s therefore interesting that two weekends in a row I’ve heard auctioneers announce that rates are low and likely to drop further. Maybe they have inside information the rest of us are not party to, or simply think their buyers are living in a box!?
Regardless, as we move into the cooler months, stock typically drops and this could well translate into higher competition around the few good listings available. For buyers; it’s better to act on those opportunities available than try and ‘time the market’ thereby risking getting caught on the wrong side of the property clock.
| Clearance Rate: | 61% | ||
| Total Auctions: | 532 | ||
| Sold: | 327 | Passed in: | 205 |
| At auction: | 265 | Vendor Bid: | 133 |
| Before auction: | 61 | Real bid: | 72 |
| After auction: | 1 | ||
| Total Private Sales: | 594 | ||
| Source: www.reiv.com.au | |||
The NPB clearance rate has lifted from last week, which is largely in line with results published by the REIV. Mostly made up from those negotiated post auction, it was still surprising to see such a significant jump. With fewer quality listings coming onto the market, we expect the clearance rate to remain stable over the coming weeks and perhaps rise as competition around existing ‘good’ property increases. However whether this will result in price rises is debatable.
| NPB Clearance Rate: | 77% | ||
| Total Auctions Reviewed: | 35 | ||
| Sold: | 27 | Passed in: | 8 |
| Under $600k+: | 8 | 3 | |
| $600k-$1m: | 10 | 2 | |
| $1m+: | 9 | 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 35 properties reviewed by NPB this weekend:
| Suburb | Type | Beds | Quote | Result |
| Diamond Creek | House | 3 | $350-380k | SOLD $385,000 |
| Bundoora | Townhouse | 3 | $380-420k | SOLD $393,000 |
| Lilydale | House | 3 | $370-400k | SOLD $416,000 |
| Heidelberg Heights | Townhouse | 2 | $380-420k | SOLD $430,000 |
| Nunawading | House | 3 | $450k+ | Passed In |
| Elsternwick | Apartment | 2 | $450-500k | SOLD $490,000 |
| Vermont | House | 3 | $470-500k | Passed In |
| Abbotsford | House | 1 | $470-520k | SOLD $505,000 |
| Box Hill North | House | 3 | $450k+ | SOLD $510,000 |
| Kensington | Townhouse | 3 | $520-560k | Passed In |
| Mentone | Townhouse | 2 | $550-600k | SOLD $565,000 |
| Sold | 8 | |||
| Passed In | 3 | NPB Clearance Rate 73% | ||
| Total | 11 | |||
| Suburb | Type | Beds | Quote | Result |
| Yarraville | House | 2 | $580-620k | SOLD $608,000 |
| St Kilda | House | 3 | $600-650k | SOLD $655,000 |
| Ascot Vale | House | 3 | $500-550k | SOLD $703,000 |
| Abbotsford | House | 2 | $650k+ | SOLD $760,000 |
| Carnegie | House | 2 | $720-790k | SOLD $792,000 |
| Kensington | House | 3 | $680-720k | SOLD $830,000 |
| Port Melbourne | Apartment | 3 | $700-750k | Passed In |
| Coburg | House | 4 | $750-825k | SOLD $830,000 |
| Aberfeldie | House | 3 | $775-850k | SOLD $850,000 |
| Kensington | House | 3 | $760-820k | SOLD $851,000 |
| Beaumaris | House | 5 | $800-850k | Passed In |
| Fitzroy North | House | 4 | $900-990k | SOLD $985,000 |
| Sold | 10 | |||
| Passed In | 2 | NPB Clearance Rate 83% | ||
| Total | 12 | |||
| Suburb | Type | Beds | Quote | Result |
| Malvern East | House | 4 | $800k+ | SOLD $1,013,000 |
| Templestowe | House | 4 | $980k+ | SOLD $1,100,000 |
| Yarraville | House | 5 | $950k+ | SOLD $1,110,000 |
| South Melbourne | House | 2 | $950-1045k | SOLD $1,225,000 |
| Ashburton | House | 5 | $1-1.1m | Passed In |
| Albert Park | House | 3 | $1-1.1m | SOLD $1,270,000 |
| Sandringham | Townhouse | 3 | $1.15-1.25m | Passed In |
| Balwyn North | House | 4 | $1.2-1.3k | SOLD $1,590,000 |
| Mt Waverley | House | 4 | $1.5-1.65m | SOLD $1,668,000 |
| Brighton | House | 3 | $1.5-1.6m | SOLD $1,600,000 |
| Williamstown | House | 5 | $1.6-1.8m | Passed In |
| South Yarra | House | 3 | $1.8-2m | SOLD $2,110,000 |
| Sold | 9 | |||
| Passed In | 3 | NPB Clearance Rate 75% | ||
| Total | 12 | |||
| Sold | 27 | |||
| Passed In | 8 | NPB Clearance Rate 77% | ||
| Total | 35 | |||
AUCTIONS IN THE SPOTLIGHT
10/33 Toolambool Rd Carnegie
18 Jeffrey Street in Bentleigh East
Comment:
A well renovated 4 bedroom family home on an ample sized block of land. As such the auction was very well attended with around 60 people watching. However, genuine competition didn’t reflect interest shown from the crowd of onlookers and there were only two bidders competing. The auction opened on a genuine bid of 850k, counter bids from the second participant took the price to 900k and it eventually topped 1Mil. However, at 1.050mil the bidding dried up and the auctioneer was forced to pass the home in for negotiation. The property was subsequently sold for an undisclosed price -not far above the passed in figure.
11 England Street, Bentleigh East
Comment:
Quoted $680K – $740K 2 bidders attended the auction for this 5 bedroom weatherboard home, with a modest crowd of around 20 watchers. Opening on a genuine bid of 600k the auctioneer saw fit to vendor bid himself twice thereby taking the number to 680k until a second bidder came to the fore offering 690k. With no other competition, the property passed in for negotiation with no result yet recorded.
5 Madden Street, Balwyn North
Comment:
The art deco 4 bedroom family home situated on 900 Sqm of land managed to attract 6 bidders. Opening on a bid of 1Mil this was swiftly followed by a vendor bid of 1.2 Mil. Thereafter, a series of strong bids took the price to its on market number of 1.425M until it finally sold for 1.59Mil. A strong result.
111 Walter St, Ascot Vale
Comment:
This period home started with a $500k opening bid and with aggressive bidding between 4 prospective buyers it was soon announced on the Market at $560k. The final selling price – resulting from strong competition between two builders – was $703k. A result way and above comparable sales data.
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 Small crowd of 25 showed up to the auction of this very well located 2 bedroom apartment. Quoting 350K – $380K comparables indicated a price over 400k however the auction opened on a modest bid of 350k. With only two bidders competing, there was little competition to inspire a push into the low 400s and therefore the property passed in for negotiation at 390k.It was sold shortly after for an undisclosed price which was more in line with the comparable sales.