Melbourne Auction Results – June 16, 2014
By Peter Sarmas on 16 Jun 2014
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| Melbourne Auction Results 9th- 15th June 2014 | |||||
|---|---|---|---|---|---|
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72% 810 |
Sold at Auction: | 482 | Auction Volumes: | $442.91m | |
| Passed in: | 228 | Weekend Last Month: | 961 | ||
| Sold Before: | 99 | Weekend Last Year: | 788 | ||
| Sold After: | 1 | Houses: | 73% | ||
| Unreported: | 141 | Units: | 70% |
||
What’s Driving the Strength in the Melbourne Property Market?
I had to change my heading this morning from a booming property market to a strengthening property market. I guess that’s where the market is at the moment, sort of in between.
On the back of a record month in May it’s rather surprising that we are looking at another record month in June in terms of auctions. Not only are we expecting highs in the number of auctions, but also in the clearance rates.
Photo courtesy of: Flickr Creative Commons/_TC Photograhy_
Since the ANZAC Day weekend and excluding last week’s long weekend low auction numbers, Melbourne has averaged a clearance rate in the 70s for the past 7 weeks. This weekend Melbourne’s auction market continued to produce healthy results for sellers with a 72 per cent clearance rate from 810 auctions reported to the REIV, these are solid numbers on the back of large volumes for this time of the year.
What Am I Seeing?
It seems like property is back in fashion as currently majority of individuals are showing an interest in the industry. I’m not sure whether this is as a result of a herd mentality to buy when everyone else is buying and renovate because reality shows make it look so fun and easy.
But while having lunch over the weekend with family the conversation quickly turned to real estate. Someone was either buying a property, renovating or about to extend. Even on my social morning bike ride there was talk about getting into the market for the kids, it is certainly on many people’s agenda. Interestingly all conversations were with people who already own property and have seen their equity rise over a number of years.
“According to the Housing Industry association a number of States showed a rise in home loans with Victoria reporting a rise of 5 per cent.”
Close to my work, in the Botanic Gardens precinct, more houses are being gentrified and there is extensive new developments taking place. Definitely the most amount of activity I have seen in the area for many years.
First home buyers and investors are still dominating the sub $600,000 price point while upgraders are chasing size and location in the $1 – 2million dollar price range.
The following graph posted by Shane Oliver recently really tells a story of where the current property is when compared to the past 7 years and highlights the lows of the GFC and 2012 in Melbourne and Sydney.
Chart of auction clearances. Cooled down from last Sept qtr highs (esp Syd), but still strong v past cycles (esp Syd) pic.twitter.com/mYILgV2iYQ
— Shane Oliver (@ShaneOliverAMP) June 15, 2014
Economically
The latest Australian Bureau of Statistics shows home lending is at a record high, rising 1.4 per cent to $16,911 million in April. In April, 33 per cent went to secured finance of existing dwellings, 32.5 per cent on investment housing by individuals, 17.3 per cent on refinancing and 6.1 per cent on finance for owner occupied construction.
According to the Housing Industry association a number of States showed a rise in home loans with Victoria reporting a rise of 5 per cent. The strongest results were seen in Tasmania where homes loans increased 10.7 per cent then South Australia with 6.9 per cent.
“It seems like property is back in fashion as majority of individuals are showing an interest in the industry. I’m not sure whether this is as a result of a herd mentality to buy when everyone else is buying and renovate because reality shows make it look so fun and easy.”
Recent unemployment figures for May remained flat at 5.8 per cent as expectations that the jobless rate may have peaked, but it is unlikely there will be any improvement this year as mining investment is cut back. Victoria’s unemployment rate fell 0.2 percentage points to 6.2 per cent.
It seems the hardest sector hit by unemployment, are youth. Bank of America chief economist Saul Eslake said, ”There are actually 126,000 fewer jobs for people aged under 25, than there were at the onset of the financial crisis. Whereas there are 914,000 more jobs held by people 25 and over.”
Success Securing the Property
A Big Congratulations to Peter for successfully securing a property in one of the best streets in Mckinnon, some handy negotiations came into play. Thank you for working with me and persisting over the past few months, we got there in the end!
29a Amelia Street, Mckinnon<br />Photo: The Home Page
