Melbourne Auction Results – February 24, 2014

By Peter Sarmas on 24 Feb 2014
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Melbourne Auction Results 17th February – 23rd February 2014

79%
Clearance
Rate

1105
Reported
Auctions

Sold at Auction: 669 Auction Volumes: $689.23m
Passed in: 274 Weekend Last Month: N/A
Sold Before: 160 Weekend Last Year: 72%
Sold After: 2 Houses: 76%
Unreported: 0 Units: 75%

 

Super Saturday Sets Big Test for Melbourne Property Market

This weekend was a big test for the Melbourne property market.

It was what property commentators call a Super Saturday, as a whopping 1130 properties went under the hammer.

This is a 21 per cent increase on last weekend’s numbers, and 200 more auctions than there were during the same weekend last year (APM).

“The market appears to have continued from where it left off last year.”

The REIV reported 1105 auctions with a clearance rate of 75 per cent from 831 properties, versus 77 per cent from 795 properties reported by Australian Property Monitors.

According to APM, the number of February listings stands at 2185, which is now the third highest total for that month on record, just behind Melbourne’s last property peak in 2010 and 2011.

Clearance Rates Soar in Inner South and North East

Brighton, South Yarra, Richmond and Bentleigh were the most popular suburbs for auctions.

The inner south and the north east recorded the biggest clearance rates – both neared 85 per cent.

The market appears to have continued from where it left off last year. Over the last month we have already seen a healthy clearance rate average of over 70 per cent.

This week’s results show real strength in the Melbourne property market as demand from buyers keeps pace with supply. In some cases both agents and advocates are reporting strong sales numbers and fierce competition over sought-after homes.

Buyer Demand Remains Strong

Buyer’s advocate Cate Bakos believes this week’s activity was just as fast-paced as last week.

“In the popular middle ring suburbs the clearance rates were high; particularly in south-east areas like Carnegie, Murrumbeena, Bentleigh and surrounds where upgraders and first home buyers were fighting it out for their dream homes.”

Ms Bakos attended an auction in Murrumbeena, which highlights the current buyer demand.

“My take on the current market is that upgraders who bought late last year are now putting their properties on the market.”

“Despite formulating a sensible walk-away price, I didn’t even get to put my hand up. The selling price was $210,000 above the base of the quoted range; a devastation for some emotional buyers who didn’t foresee the strong result.”

According to Ms Bakos, our low interest rate environment and an overall shortage of character homes in the sub million-dollar range “continue to drive up prices in these tightly held areas and price bands.”

Upgraders and Investors Driving the Market

My take on the current market is that upgraders who bought late last year are now putting their properties on the market.

Investors who have seen a build-up of equity in their family home or their investment properties are also aggressively seeking to buy entry-level property in their retirement fund.

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Fear of Missing Out Pushing Many

It seems a herd mentality is creeping into the market. People are making buying decisions because a friend or relative has bought, or because they fear they will miss out on buying altogether.

There’s no doubt consumers are feeling upbeat due to record low interest rates, but I’m surprised there hasn’t been more of a reaction to the latest poor unemployment numbers and the downturn in consumer confidence.

“It seems a herd mentality is creeping into the market…”

Perhaps those buying work longer hours and feel more secure about their future.

Leading economist Stephen Koukoulas has outlined his prediction for the Australian economy, and all is not dire.

In fact, the economic picture is rosier than many would expect. Mr Koukoulas sees Australia’s GDP growing to 3.5 per cent, creating more jobs and leading to a declining unemployment rate.

“With the economy on a clear upswing, jobs growth is likely to follow to a stronger phase, of course allowing for the usual 6 to 9 months lag. In the near term, the unemployment rate is likely to nudge 6 per cent before it starts to tick lower from around the June quarter. Around 225,000 jobs are likely to be created in 2014, which will see the unemployment rate at around 5.25 per cent at the end of the year.”

APM Melbourne Weekend Auction Results – Week Ending February 24, 2014
(please see attached)

Top 5 Houses

1. 29 Sussex Street, Brighton $3,600,000
2. 88 Park Street, Moonee Ponds $3,362,000
3. 25-27 Bridge Street, Hampton $3,100,000
4. 29 Munro Street, Kew East $2,815,000
5. 1 Gahan Court, Toorak $2,720,000

Top 5 Bargain Houses

1. 1957-1963 Western Highway, Rockbank $150,000
2. 133 Spray Street, Rosebud $275,000
3. 28 Lady Penrhyn Drive, Melton West $275,000
4. 7 Walton Close, Craigieburn $306,500
5. 13 Limpopa Square, Roxburgh Park $310,000

Top 5 Apartments

1. 1-4/2 Eyre Court, Templestowe Lower $1,710,000
2. 7 Burns Avenue, Clayton South $1,620,000
3. 504/65 Beach Street, Port Melbourne $1,560,000
4. 25a Murray Street, Prahran $1,535,000
5. 52a Halifax Street, Brighton $1,370,000

Top 5 Bargain Apartments

1. 6/43 Fir Street, Whittlesea $205,000
2. 2/38 Dalgety Street, St Kilda $220,500
3. 1/24 Rooney Street, Maidstone $257,500
4. 309/363 Beaconsfield Parade, St Kilda $260,000
5. 8/3 Violet Street, Essendon $265,000

Source: REIV

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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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