Melbourne Auction Results – February 10, 2014

All eyes were on the RBA last week when they reconvened from a two month break.

With markets only pricing in a 5 per cent chance that rates would be cut by a further 0.25 per cent, the probability of an interest rate movement was always going to be limited.

The Reserve Bank’s decision to leave rates on hold for the seventh consecutive month meant they remained at an all-time-low of 2.5 per cent. What was interesting from the RBA’s meeting however was the language they used in their quarterly statement released last Friday.

They felt that the recent stimulus aimed to help the growth of the economy appeared to be working. This, together with the Aussie dollar falling 5 per cent over the last quarter, is helping to boost the Australian economy.

“This was the clearest signal from the Reserve Bank yet that the interest rate cutting cycle had come to an end.”

Indeed, this recent fall in the currency has led the RBA to revise its growth forecast for the economy upwards by 0.25 per cent.

Although the RBA acknowledged that a lower interest rate has been directly linked to a jump in the building industry, a hike in property prices as well as a gradual pick up in housing credit, they do not believe the property market is overheating as housing debt-to-income has hardly changed at 130 per cent.

Reading between the lines, the RBA’s message was that interest rates would remain on hold because any interest rate hikes could result in an increase in the dollar, which would negatively impact on our economy.

This was the clearest signal from the Reserve Bank yet that the interest rate cutting cycle had come to an end.

What Does This All Mean for Our Real Estate Market?

It appears we could be in for a year of stability and consolidation. Both property buyers and sellers who have held back on their property transaction last year are expected to be active in the market in 2014.

The fall in the Aussie dollar has led the RBA to revise its growth forecast for the economy
Photo: Newtown Graffiti

We can also expect to see more upgraders and perhaps an increase in first home buyers, as from 1 September 2014, all first home buyers (whether purchasing newly constructed or established homes) will benefit from a 50 per cent stamp duty concession.

Mixed Messages Over The Weekend

There were also mixed messages over the weekend with some agents in the inner-east, east and north reporting good numbers at opens while parts of the inner-west and south-east saw sparse numbers in comparison.

“Both property buyers and sellers who have held back on their property transaction last year are expected to be active in the market in 2014.”

This weekend saw the first meaningful number of properties go to auction since last year with 230 being reported to the REIV and 153 of those selling under the hammer for a clearance rate of 68 per cent, a moderate performance.

Melbourne’s Eastern Suburbs Led Last Year’s Price Growth

According to APM the eastern suburbs were largely responsible for the 8.6 per cent increase in Melbourne house prices last year.

The strength of the market was reinforced with a significant increase in the use of auctions. According to RP Data, the use of auctions jumped from 21 per cent in 2012 to 30.6 per cent in Novevember 2013. Typically, the use of auctions increases with rising property prices and increased buyer demand.

APM Melbourne Weekend Auction Results – Week Ending February 10, 2014
(please see attached)

Top 5 Houses

1. 4 Ian Road, Mount Martha $1,480,000
2. 25 Gordon Street, Elsternwick $1,222,000
3. 170 Booran Road, Glen Huntly $1,210,000
4. 46 Stanley Street, Black Rock $1,140,000
5. 4 Lincoln Avenue, Glen Waverley $1,100,888

Top 5 Bargain Houses

1. 22 Kalimna Crescent, Coolaroo $252,900
2. 9 Hand Street, Warburton $307,000
3. 86 Shane Avenue, Seabrook $348,000
4. 41 Foleys Road, Deer Park $365,000
5. 19 Shiraz Crescent, Narre Warren $367,000

Top 5 Apartments

1. 7/45-49 Kent Road, Surrey Hills $1,001,000
2. 10A Hobart Street, Bentleigh $971,000
3. 50B Abbin Avenue, Bentleigh East $815,000
4. 5/163-171 St Georges Road, Northcote $810,000
5. 1/35 Hunter Street, Glen Waverley $800,000

Top 5 Bargain Apartments

1. 2/28 Forrest Street, Albion $260,000
2. 13/23 Davison Street, Richmond $282,000
3. 10/67 Ballarat Road, Footscray $292,500
4. 2/127 Kitchener Street, Broadmeadows $310,000
5. 2/34 Wordsworth Avenue, Clayton South $315,000

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]