by Antony Bucello & Catherine Cashmore
The ‘feel good’ furore surrounding Melbourne’s real estate market continues to grow along with the news that overall turnover is some 15 per cent above that recorded this time last year and a collective year to date clearance rate of 69 per cent.
Whilst everyone is cautioning against the prospect of ‘boom’ price rises, it’s not inconceivable that increased competition will cause the same old angst amongst buyers of ‘get in quick before it’s too late’ – a feeling we are ‘oh’ so used to seeing in a heated auction atmosphere.
By all accounts, the fifth biggest auction weekend on record went down a storm. A 68 per cent clearance rate was recorded which is in line with the new 2013 ‘norm,’ but more remarkable was the overall turnover of stock that changed hands. A whopping 1364 properties were recorded as ‘sold’ this week – a combination of private sales, auction sales and those purchased ‘prior to auction’ – a number we haven’t seen since the latter half of 2009 during which clearance rates were in excess of 80 per cent.
Importantly, the high number of private sales indicates suburbs in the outer suburban regions of Melbourne are starting to benefit from the ripple of competition radiating from the inner city core – areas less dependent on our clearance rate as a barometer of market performance.
As a natural consequence, any stock that was lingering in the post Christmas malaise has been soaked up and agents are once again struggling to find quality listings to meet demand. If nothing else, this will have the most significant effect for home buyers because as stock tightens, the game of ‘deepest pockets wins’ takes a hold which subsequently produces marginal price growth.
Overall auction volumes are higher than both 2011 and 2012 with clearance rates in the suburbs of Hawthorn and Richmond well in excess of 80 per cent. Once again, it proves how fragmented demand can be across a relatively small urban area.
Last year started slow – coming out of a few dismal pre-Christmas summer sales we had clearance rates below 50 per cent and dismal transaction figures – the market didn’t start to improve until the latter half of the year. This year, it seems we’re back to the traditional seasonal shifts. Summer and autumn have evolved from a very low base to produce strong results. It will be interesting to see if the atmosphere sustains as we head into winter and what’s traditionally a quieter real estate period.
| Clearance Rate: | 68% | ||
| Total Auctions: | 884 (91 unreported) | ||
| Sold: | 753 | Passed in: | 353 |
| At auction: | 629 | Vendor Bid: | 223 |
| Before auction: | 123 | Real bid: | 130 |
| After auction: | 1 | ||
| Total Private Sales: | 611 | ||
| Weekly Turnover: | 1364 | ||
| 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. The properties we highlight are taken from a selection which we carefully analyse for quality assessment and revise daily.
NPB’s clearance sustains the improving trend evidenced in national data – proving the increasing strength of Melbourne’s quality residential property market.
| NPB Clearance Rate: | 79% | ||
| Total Auctions Reviewed: | 61 | ||
| Sold: | 48 | Passed in: | 13 |
| Under $600k+: | 18 | 8 | |
| $600k-$1m: | 18 | 2 | |
| $1m+: | 12 | 2 | |
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 61 properties reviewed by NPB this weekend:
| Suburb | Type | Beds | Quote | Result |
| St Kilda | Apartment | 1 | $240-260k | SOLD $257,000 |
| Brunswick West | Apartment | 1 | $250-275k | PASSED IN |
| Collingwood | Apartment | 1 | $260-290k | SOLD $287,500 |
| Brunswick | Apartment | 1 | $270-290k | SOLD $290,000 |
| Thornbury | Apartment | 1 | $260-285k | SOLD $302,000 |
| South Yarra | Apartment | 1 | $350-380k | Passed In |
| Coburg North | House | 3 | $400-440k | SOLD $457,000 |
| Glen Iris | Apartment | 2 | $400-440k | Passed In |
| Caulfield | Unit | 2 | $420-460k | Passed In |
| Mitcham | Unit | 2 | $450-485k | SOLD $487,000 |
| Surrey Hills | Unit | 2 | $450-490k | SOLD $490,000 |
| West Footscray | House | 3 | $450-500k | SOLD $500,000 |
| Pascoe Vale | House | 3 | $430-475k | SOLD $504,500 |
| Reservoir | House | 3 | $430-475k | Passed In |
| Reservoir | House | 3 | $440-480k | SOLD $480,000 |
| Murrumbeena | Unit | 2 | $400-440k | SOLD $535,000 |
| Elwood | Apartment | 2 | $480k+ | Passed In |
| Murrumbeena | Unit | 2 | $490-540k | SOLD $540,000 |
| Glen Iris | Unit | 2 | $490-530k | SOLD $560,000 |
| Pascoe Vale Sth | Townhouse | 3 | $500-550k | Passed In |
| Prahran | Apartment | 2 | $530-570k | SOLD $575,000 |
| Bentleigh | Unit | 2 | $510-560k | SOLD $580,000 |
| Camberwell | Unit | 2 | $500-550k | SOLD $585,000 |
| Yarraville | House | 3 | $520-570k | Passed In |
| Pascoe Vale | Townhouse | 4 | $500-550k | SOLD $595,000 |
| Preston | House | 3 | $540-590k | SOLD $596,000 |
| Sold | 18 | |||
| Passed In | 8 | NPB Clearance Rate 69% | ||
| Total | 26 | |||
| Suburb | Type | Beds | Quote | Result |
| Brunswick | House | 2 | $490-540k | SOLD $610,000 |
| Prahran | Apartment | 2 | $500-550k | SOLD $626,000 |
| Surrey Hills | Unit | 2 | $520-570k | SOLD $631,000 |
| Carnegie | Unit | 2 | $450-495k | SOLD $641,500 |
| Wheelers Hill | House | 4 | $570-620k | SOLD $647,000 |
| Surrey Hills | Unit | 2 | $500-550k | SOLD $652,000 |
| Carnegie | House | 2 | $540-590k | SOLD $686,000 |
| Brunswick | Warehouse | 2 | $590-650k | SOLD $697,000 |
| Ivanhoe | House | 3 | $650-700k | SOLD $710,000 |
| Brighton | Unit | 2 | $550-600k | SOLD $722,000 |
| Newport | Townhouse | 4 | $650-720k | Passed In |
| Preston | House | 3 | $660-720k | SOLD $732,000 |
| Yarraville | House | 3 | $690-760k | Passed In |
| Brighton | Townhouse | 3 | $740-785k | SOLD $762,500 |
| Moonee Ponds | House | 3 | $700-770k | SOLD $767,500 |
| North Melbourne | House | 3 | $640-700k | SOLD $789,000 |
| Thornbury | House | 3 | $730-780k | SOLD $856,000 |
| St Kilda East | House | 2 | $790-870k | SOLD $872,500 |
| Brighton | Townhouse | 3 | $700-770k | SOLD $932,000 |
| McKinnon | House | 3 | $840-890k | SOLD $965,000 |
| Sold | 18 | |||
| Passed In | 2 | NPB Clearance Rate 90% | ||
| Total | 20 | |||
| Suburb | Type | Beds | Quote | Result |
| South Yarra | Apartment | 2 | $830-890k | SOLD $1,005,000 |
| Balwyn North | House | 3 | $820-900k | SOLD $1,140,000 |
| Alphington | House | 4 | $950-1050k | Passed In |
| Coburg | House | 3 | $1-1.1m | SOLD $1,250,000 |
| Prahran | House | 3 | $1.05-1.15m | SOLD $1,257,500 |
| Ivanhoe | House | 3 | $1.05-1.15m | SOLD $1,260,000 |
| Seddon | House | 4 | $1.1-1.28m | SOLD $1,345,000 |
| Kew | House | 3 | $1.15-1.25m | SOLD $1,505,000 |
| Ivanhoe | House | 4 | $1.2-1.3m | Passed In |
| Ivanhoe East | House | 5 | $1.75m+ | SOLD $1,900,000 |
| Brighton | House | 4 | $1.7-1.9m | SOLD $2,050,000 |
| Camberwell | House | 5 | $2-2.2m | SOLD $2,611,000 |
| Windsor | House | 3 | $2.5m+ | Passed In |
| Hawthorn | House | 7 | $4m+ | SOLD $4,415,000 |
| Kew | House | 5 | $4.5m+ | SOLD $5,100,000 |
| Sold | 12 | |||
| Passed In | 3 | NPB Clearance Rate 80% | ||
| Total | 15 | |||
| Sold | 48 | |||
| Passed In | 13 | NPB Clearance Rate 79% | ||
| Total | 61 | |||
AUCTIONS IN THE SPOTLIGHT
8/74 Dundas Street, Thornbury
9 Hawker Street, Ivanhoe
Comment:
It took two vendor bids of $1,050,000 and $1,075,000 to kick this auction into gear. Thereafter, two bidders to joined the party and the auction gained tempo. At $1,200,000 the auctioneer returned from his half time break to announce the property ‘on the market.’ With a third bidder joining in, the home managed to achieve a very strong ‘under the hammer’ result of $1,260,000.
9 Danson St, Highett
Comment:
Competition was waning for this 3 bedroom updated home in ‘beachside’ Highett. Opening on a vendor bid of $670,000 – after which another vendor bid of $680,000 followed – the auctioneer was forced to concede temporary defeat.
However, interest ignited post auction and a sale price of $715,000 was subsequently recorded.
25 Molesworth Street, Prahran
Comment:
Located opposite a park, Molesworth is considered one of the best streets in Prahran, however, despite a fairly large crowd, only two bidders’ showed interest. The auction opened on a vendor bid of $880,000 after which the pace ‘plodded’ along in increments of 10K. At $960,000 – bidding exhausted – the home passed in for negotiation, and sold soon after for $980,000
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
Comment:
An opening bid of $250,000 from one of the four bidders in attendance got the auction underway for this one bedroom unit in the heart of Thornbury. Heated competition pushed the price quickly past the quoted range until the reserve of $295,000 was met. With a few final bids, the apartment was knocked down at $302,000 to a very delighted first home buyer.