by Antony Bucello & Catherine Cashmore
A 71 per cent clearance rate was recorded this weekend from a total of 511 sales. It’s a strong increase from last week’s revised 63 per cent and once again we seem to be in a market where competition is heating up across all price points.
The REIV have released data for the first quarter of this year, noting that the Melbourne median house price has increased 5.1 per cent to $561,500, from a revised December 2012 median of $534,000.
It should be noted that the REIV are now adjusting their data to allow for seasonal distortions, therefore although the nominal median actually dropped 0.9 per cent (no doubt due to the post Christmas malaise which typically depresses the median in the first quarter of each year) – their calculations have resulted in a rather robust first quarterly increase.
The strong change is also due in part to a December ‘seasonal adjustment’ to the median house price, taking it from $555,000 – to $534,000.
The percentage to add or deduct from a median price when re-assessing the data is evaluated by looking at the ‘average’ seasonal shift during the same quarter over a lengthy time scale. The information is then used to assess the amount to either add, or subtract, from the raw data. Further detail on the exact technique used by the REIV is scant – albeit, it should be noted that the changes are not minor.
Last week Westpac released its quarterly “Westpac-Melbourne Institute consumer house price index” showing a 26 per cent increase in the number of consumers expecting to see higher house prices by this time next year. According to the report, this is the “most bullish outlook since 2010” with only 8 per cent of those surveyed expecting prices to drop.
The results are somewhat puzzling because they come on the back of the Westpac “consumer sentiment index” released just two days prior, which stressed a ‘surprising’ drop of 5.1 per cent following a 9.9 per cent rise in the two months preceding. The report comes with the title “consumer sentiment stumbles” which indicates confidence remains ‘fragile’ which they assess could be due to Europe and the Cypriot debt crisis.
As with all indexes – using short term data to assess long term trends leaves plenty of room for error – therefore the results should be viewed with some scepticism. It should also be remembered that we’re approaching a Federal Election and passions are understandably high. The RBA have made it clear rates are not likely to move until further notice leaving room to ‘drop if they have to’ – and few economists are tipping a rise.
Whilst no one is predicting a return to ‘boom’ growth, the yearly outlook is shaping up to be positive for property investors – there’s still plenty of stock available and the market seems to have turned the corner showing a promise of modest gains.
|Total Auctions:||511 (10 unreported)|
|At auction:||301||Vendor Bid:||97|
|Before auction:||56||Real bid:||57|
|Total Private Sales:||563|
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:||88%|
|Total Auctions Reviewed:||35|
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:
|Ascot Vale||Apartment||2||$350-380k||SOLD $406,000|
|St Kilda||Apartment||2||$500-540k||SOLD $520,000|
|Passed In||1||NPB Clearance Rate 88%|
|Balwyn North||Unit||2||$550-600k||SOLD $605,000|
|Passed In||1||NPB Clearance Rate 93%|
|Brighton East||House||4||$1m+||PASSED IN|
|Malvern East||House||3||$1.1-1.2m||SOLD $1,206,000|
|Port Melbourne||House||3||$1.2m+||SOLD $1,275,000|
|East Melbourne||House||2||$1.2m+||SOLD $1,380,000|
|Albert Park||House||3||$4m+||SOLD $4,300,000|
|Passed In||2||NPB Clearance Rate 81%|
|Passed In||4||NPB Clearance Rate 88%|
AUCTIONS IN THE SPOTLIGHT
186 Pickles Street SOUTH MELBOURNE
- Reported by:Antony Bucello
- Crowd:40 people (approx.)
- On the Market:$600,000
- Result:SOLD $741,000
Opening on a real bid of $600,000, this property – un-renovated – attracted strong competition. The auctioneer announced the property on the market at $650,000, however with 3 bidders still competing; the home attracted another $90K before selling at $741,000.
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.
Antony Bucello and Catherine Cashmore