Melbourne Auction Results – December 9, 2013

By Peter Sarmas on 9 Dec 2013
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Melbourne Auction Results December 9, 2013

Melbourne Auction Results – December 9, 2013

Real Estate is Confusing at the Moment

The Melbourne auction clearance rate for this weekend was 66 per cent.

Last week the REIV revised back their clearance rate to 68 per cent from 70 per cent after collecting data on nearly 98 per cent of sales.

This weekend’s auction results cement what we have been saying over the past three weeks – the Melbourne property market has been softening.

On the other hand I am constantly being reminded of auctions that surpass even buyer advocate’s estimates by an average of 10-12 per cent, so it makes it really confusing for those just entering the real estate market, and even those seasoned investors who have bought and sold property before.

Why this Weekend’s Clearance Rate Wasn’t Surprising

RP Data Victoria housing market specialist Robert Larocca believes this weekend’s result was to be expected. “After an unprecedented five consecutive 1,000 plus weekends it is not a surprise that the clearance rate has continued to cool.

“This is especially as the current rise in auction listings is outstripping the broader rise in transactions in the residential market.”

“This weekend’s auction results cement what we have been saying – the Melbourne property market has been softening.”

This has also had an impact on prices. The more expensive segment of the market is now performing worse than the most affordable one, which contrasts with the equal growth both segments experienced over the past year.

“There are only two weekends for auctions left this year and buyers will continue to have the upper hand,” Mr Larocca said.

Real Estate is Confusing at the Moment

The outer and inner east were the best peforming areas for houses.
Photo: Jay Woodworth

The Best Performing Areas

A closer look at this weekend’s numbers point to strong clearance rates in the outer and inner east, which were strongest for houses. The inner east was the best performer when it came to units.  

It’s important to highlight that auction clearance rate numbers only account for approximately 27 per cent of total sales at any one time in Melbourne. The rest are private sales.

Many of these auctions are located in inner suburbs (those considered to be 10kms from Melbourne’s CBD), and Melbourne’s east.

A Tale of Two Areas

According to realestate.com.au, suburbs that have been struggling to cope due to an oversupply of homes include Truganina, which has 1318 properties for sale; Doreen, which has 981 properties on the market; Cranbourne, which has 1152 properties on the market; and Pakenham, which has 1485 properties for sale. All are more than 20kms from the CBD.

In comparison, blue chip suburbs like Armadale and Elsternwick have 26 and 48 properties on the market respectively.

This highlights the disparity between the two areas. While one has an abundance of stock, the other is in drastic undersupply.  

“A closer look at this weekend’s numbers point to strong clearance rates in the outer and inner east…”

Last week’s release of RP Data’s Home Value Index Results showed a mere 0.1 per cent growth across all capital cities.

Sydney and Melbourne were the standout performers over the last 12 months. Sydney house prices were up 12.5 per cent, while Melbourne house prices were up 6.6 per cent.

RP Data’s senior analyst Cameron Kusher noted that the growth rate had slowed over the three months to November 13. Melbourne’s house values only grew 1.5 per cent versus a very solid 5.8 per cent growth in Sydney.

The RBA’s December Interest Rate Decision

The RBA has adopted a wait-and-see approach before making any decision on interest rates moving forward.

Last week’s meeting was the last for this year, which will give Reserve Bank Governor Glenn Stevens and his team time to observe the impact that the falling Australian dollar has on the economy.

The general consensus is that a lower Aussie dollar will help stimulate our economy and even eliminate the need for further rate cuts in 2014.

Top 5 Houses

1. 37-39 Rochester Road, Canterbury $5,760,000
2. 29 Wilson Street, Carlton North $3,850,000
3. 11 Kent Avenue, Brighton $3,770,000
4. 11 Grange Road, Kew $3,250,000
5. 59 Cookson Street, Camberwell $2,613,000

Top 5 Bargain Houses

1. 10 Seville Street, Pakenham $270,000
2. 2/2 May Street, Altona North $270,000
3. 4 Bishop Place, Epping $295,000
4. 46 Calendula Circuit, Epping $297,000
5. 5 Felix Way, Tarneit $312,000

Top 5 Apartments

1. 1/25 Chatham Road, Canterbury $1,560,000
2. 406/360 St Kilda Road, Melbourne $1,555,000
3. 17 Murray Street, Richmond $1,540,000
4. 2/273 Beach Road, Black Rock $1,371,000
5. 61 Lang Street, South Yarra $1,370,000

Top 5 Bargain Apartments

1. 449/800 Swanston Street, Carlton $160,000
2. 4/1 Somers Street, Noble Park $175,000
3. 4/10 Sunnyside Avenue, Dandenong $180,000
4. 5/29 Macartney Street, Reservoir $188,000
5. 23/50 Middle Road, Maribyrnong $191,000

Source: REIV

For a basic snapshot of your suburb’s performance or a property report customised for your property, request a Free Market Report.

If you are thinking of buying selling or investing and would like a FREE 5 minute chat
with Street News Director Peter Sarmas, please contact him on 0418 740 606
or via email at [email protected]

About the Author

Peter Sarmas is a Certified Property Investment Advisor (PIAA) and Vendor/Buyer Advocate. Before becoming the founder of Street News, Peter completed a Degree in Applied Science (Chemistry) and a Graduate Diploma in Property Valuations (Hons). Peter believes property investing is a major and potentially risky undertaking. In his view, everyone should have an independent person acting on their behalf when seeking property investment advice.

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