Melbourne Auction Results – February 3, 2014

By Peter Sarmas on 3 Feb 2014
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Melbourne Auction Results 27th January – 2nd February 2014

74%
Clearance
Rate

90
Reported
Auctions

Sold at Auction: 45 Auction Volumes: $39.16m
Passed in: 23 Weekend Last Month: N/A
Sold Before: 22 Weekend Last Year: 69%
Sold After: 0 Houses: 79%
Unreported: 0 Units: 60%

 

Early Indications Positive, RBA Meet Tomorrow

There is something in the real estate market that seems to have property people pretty excited.

It’s very early days, but a number of agents have reported a stronger than usual January. Much of their overhanging Christmas stock has been snapped up by astute buyers concerned about further price increases and a rise in interest rates.

Now I know many pessimists will point to those outer suburbs that still have large amounts of available property. They might even point to the so-called ‘blue chip’ areas that many buyer advocates are promoting to their clients. Both are flagging in price and suffering from an oversupply of certain property types.

But generally speaking, the property market appears as buoyant as it was back in 2010.

“It’s very early days, but a number of agents have reported a stronger than usual January.”

This sentiment is supported by RP Data’s latest National Media Release. Their Home Value Index rose 1.2 per cent for all capital cities in Australia.

Melbourne values were up 3.4 per cent over the three months to January 2014, which pushed gross rental yields to 3.3 per cent for homes and 4.2 per cent for units; the lowest gross rental yields in the country.

According to Tim Lawless, RP Data’s head of research, “Sydney and Melbourne were clear drivers for capital gains over the past year, with values up 13.4 per cent and 11.9 per cent over the 12 months ending January 2014.”

The latest capital city dwelling values have increased by 13.2 per cent since 2012, and are now 4.8 per cent higher than they were at their previous peak in October 2010.

Melbourne Auction Clearance Rates

According to APM, Saturday’s metro auction clearance rate in Melbourne was recorded at 73.6 per cent, although it must be said that this is from a very small number of properties going to auction (72).

Over the next two weeks, 861 homes are scheduled to go under the hammer, an increase of 160 from the same period last year.

The general feeling from real estate agents and buyer advocates is that buyer and vendor sentiment is improving. There are already a large number of properties booked for February and March auctions.

“Generally speaking, the property market appears as buoyant as it was back in 2010.”

Buyer’s advocate Cate Bakos believes there was clear evidence last year that investors flooded the property market. “There is still an apparent hangover from the strong finish in the December quarter, which  is seeing the emergence of energised first home buyers, upgraders and emotional buyers,” she said.

“Many buyers made the bold decision to buy early this year; some to make sure they don’t miss the market like many did in 2009/2010, and others to ensure that they too get to enjoy the growth phase that 2014 seems to be representing based on current market sentiment, the latest economic commentary and 59 year low interest rates.”

As stock levels for quality properties have already diminished and appetite for property is rising, we would expect clearance rates to continue to be strong, at least in the first quarter of this year.

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What Will The RBA Do Tomorrow?

These latest figures, together with the low Aussie dollar and a higher than expected inflation reading, will likely result in interest rates remaining on hold in the short term. We may see an increase in the chance of a rate rise in the first half of this year.

According to Rismark CEO Ben Skilbeck, “while a moderation in growth is expected for Melbourne and to a lesser extent, Sydney, strong population growth, an increasing appetite for housing credit and a positive consumer sentiment means we are likely to see declines in the near term.”

Mr Skilbeck pointed out that growth in lending has increased from its lows in 2013, most notably in the investor market. However, lending to the occupier market also increased by 19 per cent since the same time last year.

APM Melbourne Weekend Auction Results – Week Ending February 3, 2014
(please see attached)

Top 5 Houses

1. 4 Wren Court, Portsea $2,275,000
2. 151 Marine Drive, Safety Beach $1,262,000
3. 71 Nungerner Street, Balwyn $1,260,000
4. 3 Barkly Street, Box Hill $1,240,000
5. 13 Warrigal Road, Mentone $1,240,000

Top 5 Bargain Houses

1. 12 Second Avenue, Melton South $206,000
2. 35 Aleppo Crescent, Frankston North $219,500
3. 1 Cedar Street, Doveton $335,000
4. 50 Beaumont Crescent, Lalor $390,000
5. 78 Gum Nut Drive, Langwarrin $410,000

Top 5 Apartments

1. 4/3 Oak Grove, Brighton $940,000
2. 1/1141 Hoddle Street, East Melbourne $652,000
3. 99A Marlborough Street, Bentleigh East $627,500
4. 3/20 Collins Street, Mentone $614,000
5. 8/5-11 Orion Street, Vermont $609,000

Top 5 Bargain Apartments

1. 1201/408 Lonsdale Street, Melbourne $302,500
2. 3/30 Argyle Street, West Footscray $340,000
3. 1/32 Grosvenor Street, South Yarra $405,000
4. 18/8-18 Whitehall Street, Footscray $410,000
5. 13/8-18 Whitehall Street, Footscray $420,000

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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