Melbourne Auction Results – August 24th, 2015

By Peter Sarmas on 23 Aug 2015
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Melbourne Auction Results 24th August 2015

74%
Clearance
Rate

770
Reported
Auctions

Sold at Auction: 474 Auction Volumes: $534.31m
Passed in: 201 Last Weekend: 836
Sold Before: 94 Last Year: 675
Sold After: 1 Houses: 78%
    Units: 66%

 

A clearance rate of 74 per cent was recorded this weekend compared to 76 per cent last weekend and 71 per cent this weekend last year. There were 770 auctions reported to the REIV this weekend, with 569 selling and 201 being passed in, 80 of those on a vendor bid.

More than 4000 auctions are expected to be held this month – including about 1000 auctions next weekend.  This is the first time ever that 4000-plus auctions have been held in August.

Two suburbs over the weekend which had more auctions pass in than properties sold were Parkdale and Moonee Ponds with 5 from 8 unsuccessful.

The US sharemarket plummeted 531 points on Saturday our time, on concerns over China’s slowing economy. Despite this bad news, Melbourne’s auction market held up at 74 per cent, although clearance rates have trended down the past few weeks to levels not seen since the second half of May this year.

A common sign I witnessed at the auctions attended were women with parents by their side buying units, in particular villa units. Whether the purchase is a joint one with mum and dad or, on their own with their help, I’m not sure but their presence was evident and bidding strong.

Also worth noting is the latest Corelogic RP Data new figures revealing the average number of days it takes to sell a house has hit near record lows.

According to CoreLogic RP Data figures days it now takes an average 37 days to sell a home in a capital city. The lowest ever was 35 days which was achieved in November last year. Both Sydney and Melbourne were much less than that, achieving their lowest days on market levels of 26 days and 32 days. In Adelaide it takes on average 52 days, Brisbane, 55 days, Perth 61 days and Hobart 64 days to sell.

You may have to wait around a lot longer in Darwin if you want to sell with average days on market 96 days.

Melbourne Postcodes On Credit Watchlist

With interest rates at record low levels, one of the major headlines that caught my eye this week was an article about the NAB which put 40 postcodes around Australia on its credit watchlist.

Although mortgage delinquencies are at very low levels and relatively stable, banks are reassessing their loan books and pricing in “risk” in the event of an economic downturn and/or interest rate hike. Big banks are yet to experience a significant increase in bad debts but the latest round of results suggest personal loans and exposure to the resource and agriculture sectors are emerging as likely stress points. 

NAB chief risk officer David Gall said rising interest rates and unemployment were the two biggest risks for the Australian banking sector and investigation of pressure points needed to examine the micro-level of Australia’s 2500 postcodes.

In its 40 hotspots, NAB is conducting a more stringent assessment of loan applications, including increasing the amount of equity that borrowers require.
 
“We do have higher-risk postcodes and we make calls on what we think is the appropriate loan-to-value [LVR] ratio in those higher-risk postcodes,” Mr Gall said.

“One of the things that we definitely factor in is where there is actually higher unemployment, or a risk of higher unemployment, given the reliance on single industries for a town or region. We will also look very closely at areas that have had very dramatic increases in property values to consider what is the right ongoing LVR ratio as well.”

NAB would not disclose what postcodes are on its watchlist but Martin North, principal at Digital Finance Analytics, has analysed Australia for the postcodes most susceptible to stress if interest rates or unemployment rise. Like NAB, his model looks at employment scenarios for towns with single industries and recent property price rises, along with income levels relative to mortgage debt.

In Melbourne, Mr North found the postcodes most at risk of default are Aberfeldie, Essendon and Essendon West (3040); Gladstone Park, Gowanbrae and Tullamarine (3043); Pascoe Vale (3044); Belgrave and Tecoma (3160); Mount Evelyn (3796); Endeavour Hills (3802); and Berwick and Harkaway (3806).

The geomap below produced by DFA shows the relative number of households in each postcode experiencing mortgage stress.

The areas with the highest count are listed below. Note the DFA segment distribution represented in each one. Whilst many are young families or disadvantaged, many are more wealthy, have had access to larger loans and more valuable property. As a result they are more exposed, especially as incomes are static and costs are rising. Some are also getting squeezed by lower returns from savings and deposits with the banks.

Suburbs which most people would not be expected to make the list were Richmond, Hawthorn, Mount Waverley, Eltham, Blackburn and Essendon. Some of these suburbs commanding million dollar price tags in the current market for property.

 

TOP 5 HOUSES
1. 17 Marriott Parade, Glen Waverley $6,000,000
2. 5 Mawson Street, Kew $4,695,000
3. 100 Lewisham Road North, Prahran $3,510,000
4. 13 & 15 Thames Street, Box Hill $3,380,000
5. 1 Ultimo Court, Toorak $3,310,000

TOP 5 BARGAIN HOUSES
1. 106 Power Road, Doveton $312,000
2. 8 Burrora Way, Craigieburn $320,000
3. 83 Entally Drive, Albanvale $328,000
4. 104 Power Road, Doveton $330,000
5. 33 Thames Boulevard, Werribee $334,000

TOP 5 APARTMENTS
1. 904/147 Beach Street, Port Melbourne $1,780,000
2. 8/107 Wattle Valley Road, Camberwell $1,710,000
3. 5Lg/18 Acacia Place, Abbotsford $1,675,000
4. 45 Whitmuir Road, Mckinnon $1,480,000
5. 2/5 North Road, Brighton $1,450,000

TOP 5 BARGAIN APARTMENTS
1. 2/25 Petrie Street, Frankston $262,000
2. 3/242 Pascoe Vale Road, Essendon $265,000
3. 9/14 Jolley Street, Brunswick West $266,500
4. 30/149 Fitzroy Street, St Kilda $292,000
5. 3/61 Strathavan Drive, Berwick $295,000

Source: REIV
 

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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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