So far this year the auction clearance rates are tracking exactly as we predicted. With well over 1100 sales for the week reported to the REIV, split fairly evenly between auctions and private sales, there was a clearance rate 66% according the REIV. We attended plenty of auctions on the weekend and with a few exceptions nearly all sold for what we thought they would.
This clearance rate represents a very normal market. One here in Melbourne that would be slightly in favour of the vendor and this is usually about as balanced as it gets. However, there was a dramatic drop in available stock last week. The Herald Sun reported on Saturday that the properties on the market in Melbourne and its surrounds dropped from 8904 to 6902, however this is during a week with a public holiday so we expected some drop anyway.
What is starkly obvious about Melbourne’s inner suburban market at present is most bidders appear to be second home buyers, or downsizers. There are few, if any, first home buyers able to compete – and this is clearly evident when surveying the crowd at auctions. However, we should see a rise in the first home buyer market when the stamp duty cuts kick in during June. This is bound to cause a temporary boost in the market and purchasers looking at property which appeals to first home buyers would be wise to secure prior to this date.
42 Fairway Rd, Doncaster attracted the most attention today. With well over a hundred in the crowd this 4 bedroom house located on the edge of a golf course managed appealed to 6 hungry bidders. The quoted range was 680-750K, however unlike the other sales today, it was announced on the market within the range at 740K. With Frantic back and forth ‘tit for tat’ bidding, it finally sold for 770K.
52 Eastern Rd, South Melbourne is a renovated Georgian style double fronted property with some unique qualities ensuring it stood out from the crowd. The agent had been quoting 1.4Mil+ but expectations were obviously a good deal higher! The auction opened on a genuine bid of 1.410 Mil and in front of a crowd of approximately 150 people, two other bidders took their chances with the price moving in steady increments until it was announced on the market at 1.615 Mil (some 200K above the price quote). The property sold for 1.755 Mil. With a result 140K above reserve, the vendor was obviously very happy!
If you are considering purchasing property soon, please feel free to make an appointment and come in for a no obligation chat.
Ian James
