Melbourne Property News – September 2015
September holds strong. Clearance rates ease.
In September’s four weekends there were in excess of 3703 auctions reported to the Real Estate Institute of Victoria (REIV). More than 2780 sales were recorded. Approximately 923 properties passed in, 381 of those on a vendor bid. The clearance rate for September was 74.5%.
September produced high auction numbers with the last three weekends each having just under one thousand homes under the hammer. The averaged clearance rate dipped a bit from recent monthly highs, which can be seen as moderating rather than a significant drop. Closer analysis shows the inner city unit market clearance rate of just 55% dragged down Melbourne metro’s overall performance. The large volume of homes presented for sale is also a factor in softened clearance rates, with buyers having more choice and sellers having more competition. The recently introduced investor lending regulations have also had an effect.
Looking further afield, Sydney’s market produced the highest ever number of auctions held on September’s last Saturday (984) but delivered its lowest clearance rate in 3 years, at 69.4%.
A notable auction this month (September 19) saw a family home in Glen Waverley sell for 6 million, based on its very large 1538 sqm block size – about twice as big as its neighbours. The owner, a developer, bought the block in April this year for 4.71 million and turned it around with a 1.29 million profit. However rumour has it the sale has since fallen through.
Although the average new home block size in Melbourne today is around 400 sqm, back in 1900 the average new home block in the East was around 1200 sqm. If you have one of these and you’re still alive, you’ve hit the jackpot!
The Spring auction market will take a break next weekend with Saturday’s AFL Grand Final. Just 50 auctions are listed at this point. The weekend after that kicks back into gear with almost 1200 auctions.
Craig Knudsen
Principal Advisor
Vendor Marketing
Melbourne Property News – August 2015
Share market wavers but strong sellers market continues through August.
Over the five weekends of August, there were in excess of 3922 auctions reported to the Real Estate Institute of Victoria (REIV), with more than 3033 sales recorded. Approximately 889 properties passed in, 388 of those on a vendor bid. The clearance rate for August was 75.5%.
Winter caused auction activity to drop for several weeks in June and July, but the market resisted the traditional sharp slowdown, rebounding early with stronger than usual activity through August. August’s clearance rate is also higher this year – up from around 72% to 75.5%.
Agents also reported sales figures well above reserves in the Eastern suburbs indicating values are still edging up there. Instability in global share markets in the third week of August will only reinforce the notion of property as a stable long term investment.
In August, Melbourne was acknowledged by The Economist as the world’s most liveable city for the fifth year in a row. The REIV nominated Carlton as the most affordable suburb with one bedroom apartments there having a median price of $207,750. This reflects the development of student style accommodation, compact but on the CBD’s northern edge and presenting an entry opportunity for city workers looking for a first home.
Maribyrnong and neighbouring Footscray had the most affordable two-bedroom apartments with median prices of $410,000 and $408,000. Glenroy has the cheapest three-bedroom apartments at a median of $465,000, at just 13 kilometres from the CBD.
Chinese buyers helped bolster sales on Saturday, August 8 because the double 8 aspect is associated with luck and prosperity. This is because the figure eight is similar to the Chinese word for luck. Also, the numbers in this year’s date – 2015, added together, equal 8. More luck. Although short on logic, this phenomenon can translate to tens, if not hundreds of thousands of extra dollars, for a ‘lucky’ vendor.
Craig Knudsen
Principal Advisor
Vendor Marketing
Melbourne Property News – July 2015
Fewer auctions in July, but the median house price keeps rising.
Over the 4 weekends of July, there were in excess of 2316 auctions reported to the Real Estate Institute of Victoria (REIV), with more than 1798 sales recorded. Approximately 518 properties passed in, 216 of those on a vendor bid. The clearance rate for June was 76.5%. As expected for chilly midwinter, July was slightly down on June with (300) fewer auctions and approximately 300 fewer sales.
In the June quarter the median house price in Melbourne grew by 3.1% from $861,500 to $888,000, a lucky number for some.
Melbourne suburbs which have achieved annual capital growth of more than 20% are Mt. Waverley (28%), Doncaster (28%), Burwood (27%) and Balwyn North (23%). Balwyn North also recorded the highest number of auction sales (39 sales). Reservoir (38 sales) and Glen Waverley (37 sales) were also in the top three.
July saw the Sydney median house price surpass $1 million ($1,000,616). But close to Sydney centre $1 million will buy a 2 bedroom apartment only. However this is better than Paris and New York where A$1 million will buy a 1 bedroom apartment.
Media reports in July cited the steps being taken to cool the borrowing market, targeting landlord buyers, with ANZ and Commonwealth lifting interest rates for those borrowers by 0.27%.
The regulator also called for more capital to be held against mortgages by the big banks as a safety measure against over-borrowing and a potential house price dive. But it is expected that the banks will pass this extra (12 billion) expense onto consumers through miscellaneous charges and fees, rather than a sudden general interest rate hike.
Craig Knudsen
Principal Advisor
Vendor Marketing
Melbourne Property News – June 2015
No cooling down so far for Winter.
Over the 4 weekends of June, there were in excess of 2672 auctions reported to the Real Estate Institute of Victoria (REIV), with more than 2111 sales recorded. Approximately 561 properties were passed in, 252 of those on a vendor bid. The clearance rate for June was 77%, down a little from last weekend’s high of 79%.
Winter hasn’t put a cooler on the Melbourne market yet and activity is going strong. Auction sales to date for 2015 are close to 14,000 which is the highest on record. Outer Melbourne can claim the highest auction growth – up 20% on last year.
Changeover buyers in the Eastern suburbs are driving that powerful market, with a large Tudor style home in Box Hill selling for 2.61 million and setting a new suburb benchmark, with a tennis court and swimming pool adding spring to the price. Kew displayed its blue chip investment credentials with the successful auction of a 5.56 million home which had gained $200,000 a year in value for the owners, since its purchase for $641,820 in 1989.
Bubble talk dominated the media in June, with plenty of graphs showing dramatic up and down value cycles over the decades. However, analysts reminded us that Melbourne has seen periods of much higher growth, for example the current rate is just a third of the rate as in the late 1980’s.
BIS Shrapnel warned that research indicates an emerging oversupply in the Melbourne apartment market, as projects reach completion up to 2018, leading to a drop in values. Other commentators noted this would most likely apply to the CBD and surrounds.
Craig Knudsen
Principal Advisor
Vendor Marketing
Melbourne Property News – May 2015
Autumn ends with strongest buying in 5 years.
There were in excess of 4644 auctions reported to the Real Estate Institute of Victoria (REIV) in the 5 weekends of May with more than 3736 sales recorded. Approximately 908 properties were passed in, 425 of those on a vendor bid. The clearance rate for May was 79%, with 3 weekends at 80% or higher.
The strong buying reflects the opportunity presented by low interest rates and shows no signs of abating. Activity includes people who are downsizing, or buying a second property. Many are also taking the plunge on upgrading to the best property they can possibly afford, buoyed by the all-time low interest rates, expecting such properties will cost more in a few months time. The keen activity has created a shortage which keeps driving prices up.
Consequently, commentators with longer memories are warning this could become a bubble scenario. After pressure from regulators wanting to take some heat out of the market, some big banks have just started to tighten their lending criteria. ANZ Bank is reducing availability of discounted interest rates. NAB and Commonwealth Bank have also reduced some discounts they had offered to new investor borrowers. This is expected to slow some growth.
Looking ahead, auction numbers will be lower, with the Queen’s Birthday (June 8) holiday weekend and the onset of wintry conditions in June.
Craig Knudsen
Principal Advisor
Vendor Marketing
Melbourne Property News – April 2015
Easter and ANZAC Day produce a quieter April, but clearance rates trend high.
There were in excess of 1781 auctions reported to the Real Estate Institute of Victoria (REIV) in April, with more than 1404 sales recorded. Approximately 377 properties were passed in, 195 of those on a vendor bid. The averaged clearance rate for the month was 77%, based on the two busy weekends of 11th & 12th and 18th & 19th showing buyer confidence continues to be strong.
The Easter and Anzac Day weekends produced few auctions, but some strong sales were recorded. An ANZAC day auction in Ringwood saw the home sell for $761,000, achieving $240,000 over the reserve.
Not everyone supports having auctions on Anzac Day, with Premier Daniel Andrews somewhat strangely signalling a possible ban during the week. “It may be legal to be having auctions and things of that nature, but I think it’s pretty ordinary,” Mr. Andrews said.
Trends for the year to date show the Middle and Outer suburbs have produced the greatest net worth gains since this time last year, with Middle suburbs up by 18% and the Outer suburbs up by 27%.
Clearance rates have continued to climb so far this year with the 3 top achieving suburbs being Wantirna 97%, Ringwood 96% and Brighton 93%.
The 3 top suburbs for properties which sold before auction this year are Williamstown 33%, Glen Waverley 31% and St.Kilda 30%.
Traditionally, auction listings ease off in May as we move into colder weather, but May’s first weekend has bucked this trend with 935 auctions scheduled.
Craig Knudsen
Principal Advisor
Vendor Marketing
Melbourne Property News – March 2015
Autumn starts with busiest market since 2010.
In excess of 3700 auctions were reported to the Real Estate Institute of Victoria (REIV) in March, with more than 2866 sales recorded. Approximately 834 properties were passed in, 388 of those on a vendor bid. The clearance rate for the month averaged 75.5%.
Getting in early to avoid Easter and Anzac Day produced multiple Super Saturdays in March. Strong demand continues to drive the market in Melbourne with large numbers of auctions and sales. With no end to record low interest rates in sight the dynamic conditions of 2014 look set to continue. The averaged clearance rate for the year to date is 77% which is the highest first quarter result since the high performing 2010. The East is particularly successful with the Inner East achieving a clearance rate of 80%. The Middle and Outer regions achieving 85%. If viewed alone, the Outer East recorded a very high 95%.
It’s official that many Melbourne homeowners are doubling their money, according to CoreLogic RP Data’s ‘Pain and Gain Report’ released on March 30th. In the December 2014 quarter just 5.6% of sellers lost money on their sale, compared to 6.7% the previous quarter and 6% at the same time the year before. At the highest performing end, 38.9% at least doubled what they had originally paid for their property.
March produced another ‘Dump sells for millions’ news headline after a rundown beach front property in Middle Park sold for $4.6 million.
Craig Knudsen
Principal Advisor
Vendor Marketing
Melbourne Property News – February 2015
Clearance rates build as the top end shines.
The traditionally quiet period from December 22 to the first weekend of February recorded just 419 auctions with 256 selling, producing a clearance rate of 61%. But the year shifted quickly into gear during the remaining three weeks of February with in excess of 2585 auctions reported to the Real Estate Institute of Victoria (REIV) with more than 1991 sales recorded. Approximately 594 properties were passed in, 297 of those on a vendor bid.
The recent reduction in interest rates to a new all time low has bolstered an energetic start for 2015. Buyers have had the time over the low activity Summer break to firm their resolve and are now making their moves. The clearance rate rose steadily through February to reach 79% on the last weekend, featuring 2015’s first Super Saturday.
The rise in the stock market across February has added to buyer confidence at the higher end of the market where some sales achieved way over reserve. Notably, in February’s last week two properties in Hawthorn’s Scotch Hill precinct went over reserve by a million each. In Port Phillip, a comfortable family home in Middle Park achieved $10,000 per square metre going under the hammer for 5.5 million. However, the busiest suburbs so far this year are South Yarra and Reservoir with 43 and 42 auctions respectively.
Craig Knudsen
Principal Advisor
Vendor Marketing
Melbourne Property News – January 2015
2014 – the strongest year on record. What are the trends looking forward?
December 2014 saw in excess of 3170 auctions reported to the Real Estate Institute of Victoria (REIV), with more than 2165 sales recorded. Approximately 1005 properties were passed in, 467 of those on a vendor bid.
At 66%, the December clearance rate was down on Spring’s average of close to 70%. However it’s worth noting activity in late December eases, as attention turns to Christmas and holiday activities.
2014 was our strongest year on record for the residential auction market recording more than 40,300 auctions and 28,500 sales, which was 17% higher than 2013. There were 15 weekends with more than 1000 auctions. Overall we had record breaking auction numbers and record breaking prices.
Interest rate stability also contributed to buyer confidence which should carry momentum forward for 2015. The cash rate has held at 2.5% (a record low) since August 2013, adding further impetus. Leading economists do not expect the RBA to lift rates until late 2015 and some opinion even predicts a possible cut in rates.
Other trends that emerged clearly was the overseas buyer factor, which delivered higher than expected sale prices for some. A classic example of this was reflected on December’s final weekend with a modest Glen Waverley home selling for $2,055,000. This result could also be indicative of how top performing schools can play their part in significantly increasing local property prices.
On the other hand these higher than expected sale results also created unrealistic expectations for some vendors at the top end.
Turning our attention to 2015, the Melbourne property market will spring to life with significant numbers of homes going to auction on the final 2 weekends of February.
Craig Knudsen
Principal Advisor
Vendor Marketing
Melbourne Property News – November 2014
November’s auction numbers still strong but clearance rates moderate.
In November, there were in excess of 4832 auctions reported to the Real Estate Institute of Victoria (REIV), with more than 3227 sales recorded. Approximately 1605 properties were passed in, 827 of those on a vendor bid. Although total auction numbers were high in November, the averaged clearance rates have moved lower over the three months of Spring – with a clearance rate of 74.5% for September, followed by 71.5% for October and 65% for November.
Election weekend had a strong auction total (1213+), shrugging off the potential distraction. The large number of homes for auction this month reflects people’s desire to achieve buying or selling plans before Christmas, this includes families who are aiming to relocate (sellers in the Spring market will often be buyers as well) and get established before the start of the new school year.
Top end properties continued to attract high prices this month, particularly near the bay, with a new land price record set in Brighton, with $10,000 per square metre for a large beach-front home selling for $8.52 million, achieving the most expensive sale for Spring’s last weekend (November 29th & 30th). Second place was Brighton East with a $4.43 million sale. Activity on November’s last weekend was high in nearby St.Kilda and Port Melbourne as well. The other hotspot auction suburbs were Richmond, Reservoir and Doncaster East.
According to the REIV, activity will be busy as we enter December with more than 1500 auctions scheduled for the first weekend of December (6 & 7), continuing strongly up until the weekend of 20th & 21st, the last weekend before Christmas.
Craig Knudsen
Principal Advisor
Vendor Marketing
Melbourne Property News – October 2014
October’s Super Saturday delivers a super result!
There were in excess of 4262 auctions reported to the Real Estate Institute of Victoria (REIV) in October, with more than 3079 sales recorded. Approximately 1184 properties were passed in, 564 of those on a vendor bid. The clearance rate for the month averaged 71.5%.
September’s AFL Grand Final and November’s Melbourne Cup create a peak auction period in October, and the weekend of the 25th/26th lived up to the ‘super’ tag breaking all previous records, with over 1508 auctions and 1102 sales.
Buyers continued to jump in, banking on a continuation of low interest rates for now – but with a rise anticipated in 2015. Despite the volatility across October, the Dow Jones showed some resilience towards the end of the month, allowing a bit of reassurance for top end home-buyers, looking forward. A home in Victoria St. Camberwell achieved $450,000 above reserve and a terrace in Hume St. Armadale achieved $420,000 above reserve.
Anecdotal reports from agents suggest houses priced between $1 million and $2 million appear to be showing some resistance though. There is a lot of stock in this price bracket and although homes sell, agents are unhappy with some of the prices being achieved – the large supply putting some adverse pressure on prices. Overall properties above $2 million were doing better, agents said.
And according to a prominent Stonnington agent who was quoted in The Age, Oct. 26, smaller inner-urban Eastern properties were still in great demand: “The cottages around Prahran, Toorak and Armadale are on fire.” But fortunately, in a good way.
Craig Knudsen
Principal Advisor
Vendor Marketing
Melbourne Property News – September 2014
A great Spring start for vendors!
There were in excess of 2454 auctions reported to the Real Estate Institute of Victoria (REIV) in September, with 1855+ sales recorded. Approximately 599 properties were passed in, 275 of those on a vendor bid.
Vendors enjoyed excellent results with high clearance rates as buyers confidently stepped up to the mark bidding and buying competitively across Melbourne.
September’s first weekend achieved a clearance rate of 76% and the month averaged 74.5% however the last weekend of September there was no official clearance rate due to the low level of auctions as a result of the AFL Grand Final.
Commentators this month, (including The Reserve Bank) continued to suggest some caution for buyers due to the combination of rapidly rising values, low interest rates and the continued presence of investment buyers. But the urge to secure that ‘ideal property’ buyers have set their heart on is a strong one and the Melbourne market powered on.
There is some expectation demand will plateau a bit, as large numbers of sellers continue to put their properties up for sale in the Spring market. But the strong 2014 market has been full of surprises all year and it shows no sign yet of waning. In particular, the demand for good quality property in prime locations is still greater than the supply, which is good news for vendors.
Craig Knudsen
Principal Advisor
Vendor Marketing
Melbourne Property News – August 2014
August signs indicate a booming Spring
There were 2998 auctions reported to the Real Estate Institute of Victoria (REIV) in August, with a total of 2208 sales recorded. 790 properties were passed in, 345 of those on a vendor bid.
With an August clearance rate of 71.5%, 2014’s strong activity shows no signs of decline.
August auction numbers reflected a typical Winter slowdown but were more than 14% higher than the August average over the last 10 years. Likewise, July numbers were 17% above the recent 10 year average for that month.
At this point, the extra activity coupled with increased property values has produced transactions topping $10.8 Billion in value for the year so far, which is a 38% increase on this time last year.
August averaged about 600 auctions per weekend but Spring will bring increased numbers with several weekends expected to top the 1300 mark. More homes gives buyers more choice and it will be a real gauge of demand and the market’s willingness to support Melbourne’s record price levels, which have risen 10% over the last 12 months with a current median of just over $600,000. But given sales for this month were up by 6% compared with August 2013 the signs show people are not being deterred by the higher prices.
The fact that money (interest rates) is cheap and the notion that sitting on the fence is expensive, is still top of mind.
Craig Knudsen
Principal Advisor
Vendor Marketing
Melbourne Property News – July 2014
July keeps humming despite mid-winter weather
2014 continues with an energetic performance in July. There were 1827 auctions reported to the Real Estate Institute of Victoria (REIV), with 1340 sales recorded. 487 properties were passed in, 228 of those on a vendor bid.
Total numbers of scheduled auctions have tapered a bit with the final arrival of very cold daytime temperatures but clearance rates are still going strong, maintaining a July average of 71%. This is marginally higher than this time last year when it was 70.5%. So far this year 14% of homes have sold prior to auction – the highest level since 2010.
Looking closer at the Melbourne’s Clearance Rates, by region, reveals the Outer East was the star performer with very high clearance rate of 86.5% on the weekend of July 26th and 27th, followed by the Inner South with an 80.2% clearance rate. This compares with a clearance rate of 69% for the Inner City on the same weekend.
Both buyers and sellers singled out Wantirna as a place where it was better to seal a deal quickly, with almost 50% of all homes selling prior to auction.
With the end of the Financial Year came confirmation of the increase in Melbourne’s house prices – being an official 10.3% over the 2013-14 financial year, delivering the best annual result since September 2010.
Craig Knudsen
Principal Advisor
Vendor Marketing
Melbourne Property News – June 2014
June maintains momentum
May’s strong momentum has carried on into June with 2385 auctions reported to the Real Estate Institute of Victoria (REIV) and 1721 sales recorded. 664 of these properties were passed in, 350 of those on a vendor bid. As you would expect many vendors gave the Queens Birthday weekend a miss, with just 227 auctions and a 61% clearance rate. This follows the pattern that long weekends in Melbourne are a tricky time to put your property to auction. But as winter weather kicks in and crowds thin, some vendors might view the lack of competition as an advantage, given the continuing demand by buyers. The June clearance rate was generally high, above 70% for all weekends, apart from the Queens Birthday weekend, producing an overall monthly average of 68%.
The Parliamentary Inquiry into Foreign Investment made news this month investigating the impact of Chinese and Malaysian buyers in the Melbourne & Sydney residential markets, with lobby groups claiming both positive and negative effects. Some claimed the growing wave of wealthy Chinese nationals buying homes and apartments has caused price hikes of up to 10% in Sydney and Melbourne. Industry groups noted foreign investment in new property was promoting construction and aiding the economy. The Inquiry continues.
Craig Knudsen
Principal Advisor
Vendor Marketing
Melbourne Property News – May 2014
High numbers and high temperatures for May
May not only delivered unusually high temperatures but also high numbers of auctions, seeing 4267 auctions reported to the Real Estate Institute of Victoria (REIV), with 3075 sales recorded. 1192 properties were passed in, 653 of those on a vendor bid. The clearance rate stayed high for most of May with a strong 73% recorded on the last weekend. Over May’s five weekends, property clearance rates started in the high 60’s and finished strongly in the low 70’s, averaging 70.5% for the month. This was up a little on last month’s clearance rate of 70%.
After a booming March, then a quieter April, May was going to be a real litmus test for the ongoing strength of the market. The result was an energetic performance that keeps Melbourne on track for a record breaking season. By the fourth weekend of May there had been over 10,000 sales so far this year, compared to the previous record of 9758 at this point in 2010.
Many vendors who may have been waiting for sustained signs of an improving market have decided to make the move.
There has been a 32% jump in properties sold at auction so far this year compared to 2013. The figures show that people are not only putting properties up for sale, but that the properties are selling too. With the existing momentum and the lead up of May’s mild temperatures we may see a stronger than usual June as well, although traditionally, activity eases through mid-year with colder weather putting a dampener on property presentation, open for inspections and conditions for auctions.
Craig Knudsen
Principal Advisor
Vendor Marketing
Melbourne Property News – April 2014
Holiday breaks bring a quieter spell for April
The Easter Break and ANZAC Day long weekends saw a quieter spell for Melbourne’s Property market. Compared to March’s record breaking figure of 4,600 auctions, April was considerably quieter seeing 2,242 auctions. 1,572 sales were recorded with 670 of these being passed in, 338 of which were on a vendor bid. (Source: REIV Sat stats).
Easter Saturday posted only 35 auctions, with 21 selling, achieving an unofficial clearance rate of 60% which was significantly lower than the recent average. (Although the REIV does not include Easter figures as official clearance rates due to the low volume of auctions). The low clearance rate supports the notion that auctioning your home over Easter can pose more risks than usual.
2014 however has continued with its strong performance with nearly 7500 auction sales for the year to date with an average clearance rate this year of 71%. The clearance rate for April weakened just a little however to average 70% (69.67%), which is down on the March average of 72%. It is up on last year’s April average of 67%.
February through to March is one of the strongest times to sell a home in Melbourne and May will see a real test for the current robust market, although based on precedent April sentiment in the market tends to continue on into May.
House prices in Melbourne have risen, which traditionally brings more vendors to the market. Very popular compact inner urban homes such as single fronted, two bedroom properties continue attracting both baby boomer downsizers and young professionals starting families. Both categories are driven by a preference for a self-contained home as opposed to an apartment. This kind of property jumped in value by up to $100,000 in 2013 to around $850,000.
Craig Knudsen
Principal Advisor
Vendor Marketing
Melbourne Property News – March 2014
Record breaking March!
March has been a record breaking month totalling over 4,600 auctions, with 2891 sales reported to the REIV, 1058 were passed in with 682 on a vendor bid. The number of auctions were a full 30% above the last record of 3,525 (March 2008).
The Clearance Rate hovered week by week between a healthy 71% and 74%, giving an average of 72%. The easing rate on the last weekend is attributed to the abundance of stock going to auction. The Clearance Rate is up on last year’s March average of 65%. A good result for vendors.
March saw one quiet weekend – the long weekend (March 8) break which brought a drop in activity with Victorians heading for holiday homes and beaches in the hot weather.
2014 so far has delivered solid results. We’re seeing multiple bidders at auctions and healthy average clearance rates. A higher percentage of homes are selling, but total transactions are tracking lower than this time last year. Private sales are notably lower. This tells us that although the premium end of the market is doing well, the more affordable and larger private sale market is exhibiting some elements of a slowdown.
As well as breaking total auction records for March, median prices for this quarter have risen by 11% in Melbourne.
Craig Knudsen
Principal Advisor
Vendor Marketing
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