Melbourne Auction Results – March 31, 2014

By Peter Sarmas on 31 Mar 2014
4 Comments

Melbourne Auction Results 24th March – 30th March 2014

71%
Clearance
Rate

1124
Reported
Auctions

Sold at Auction: 661 Auction Volumes: $686.05m
Passed in: 329 Weekend Last Month: 73%
Sold Before: 130 Weekend Last Year: 69%
Sold After: 4 Houses: 72%
Unreported: 156 Units: 69%

 

Housing Prices Enter Danger Zone?

A couple of interesting figures were released last week which had every man and his dog providing their own expert opinion on the property market.

So why not me?

March Brings Strong Auction Results

Research house RP Data are due to release their Value Index Result for the five capital cities in Australia which have shown a near record growth throughout the month of March.

Head of research Tim Lawless says, “over the first 27 days of March 2014, major capital cities increased by 2.1 per cent. Clearly the flat conditions through February were an aberration and the strong housing market momentum recorded late in 2013 is continuing.”

“The market is stable, it’s not ridiculous but steady and it’s started to peak a bit. I believe people have come to their senses.”

Mr Lawless supported his view citing, “this is supported by the current strong level of auction clearance and the ongoing escalation in housing finance commitments. Given this we would anticipate a strong result for the month of March…”

Providing a More Balanced View

On the back of this latest round of data, senior economist and writer for the Financial Review, Christopher Joye led an article titled, “House Prices Enter Danger Zone”.

According to Mr Joye average Australian house prices are now 4.4 times disposable income and on track to top valuation peaks of 2006 and 2010. However, SQM Research’s Louis Christopher said Australian property was 3-4 per cent overvalued at most.

Fellow writer David Bassanese provided a more balanced view and in fact rebuffed Mr Joye’s bubble talk. Bassanese recognised that house price to income ratios are only just above average, mortgage affordability is better than the previous peak and rental vacancy yields are not far from long term averages.

Currently, in Melbourne the property market is becoming balanced. An unprecedented 1,000 plus auctions took place in the past 3 weeks with 1,320 properties reportedly being auctioned over the weekend. From these, 1,124 auctions were reported to the REIV for a clearance rate of 71 per cent.

With nearly 200 results still to be followed up by the institute there are signs that we are seeing a more steady market in Melbourne rather than one that is booming, with pass-ins being noted in a number of Melbourne’s inner and outer suburbs.

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Strong Clearance Rates are Showing a Stabilised Market

This doesn’t mean that we are still not witnessing strong clearance rates as Jellis Craig Kensington reported a 71 per cent clearance rate while real estate agent Adrian Butera from Compton Green witnessed an 85 per cent clearance for his properties surrounding Yarraville and Williamstown.

Meanwhile in the north east, Barry Plant Doncaster have seen an 86 per cent clearance rate and property prices rise up to 24 per cent over reserve.

“We are seeing a more steady market in Melbourne rather than one that is booming.”

Commenting on the market over the weekend, Director Adrian Butera of Compton Green Real Estate said, “the market is stable, it’s not ridiculous but steady and it’s started to peak a bit. I believe people have come to their senses.”

Next weekend the REIV expects around 1,220 auctions.

APM Melbourne Weekend Auction Results – Week Ending March 31, 2014
(please see attached)

Top 5 Houses

1. 21 Monash Avenue, Balwyn $3,520,000
2. 17 Rolls Court, Glen Waverley $3,416,000
3. 4 Mt Ida Avenue, Hawthorn East $3,235,500
4. 69 Alfred Crescent, Fitzroy North $3,140,000
5. 9 Fairfield Avenue, Camberwell $2,888,000

Top 5 Bargain Houses

1. 2 Dalton Drive, Melton South $179,000
2. 17 Leggatt Street, Melton South $201,000
3. 186 Hodgins Road, Hastings $210,000
4. 18 Aleppo Crescent, Frankston North $220,000
5. 7 Westcott Parade, Rockbank $285,000

Top 5 Apartments

1. 487-489 Nicholson Street, Carlton North $1,724,000
2. 5 Isabella Street, Malvern $1,550,000
3. 16A South Road, Brighton $1,450,000
4. 3/14 Wilson Street, Mont Albert $1,427,500
5. 1/15 Maylands Avenue, Balwyn North $1,400,000

Top 5 Bargain Apartments

1. 1110/131 Pelham Street, Carlton $163,500
2. 13/3 Gourlay Road, Hillside $230,000
3. 2/200 Edwardes Street, Reservoir $235,000
4. 5/79 Kernot Street, South Kingsville $240,000
5. 4/11 Johnson Street, Reservoir $257,500

Source: REIV

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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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Leave a Comment4 Comments
  1. Ross Gray said...

    Hi Peter,
    I notice that the supply of properties in outer suburbs is still outstripping demand which appears to lead to a micro property slump in a number of areas(buyers market). Is looking at whole of Melbourne figures giving people a tainted view of the real direction of property in the outer suburbs? Or is it just a matter of waiting until the ripple of interest reaches these suburbs and stimulates sales.

    April 01, 2014 @ 9:42 am

    Reply

  2. Peter Sarmas said...

    Hi Ross, thank you for your comments. It’s true a number of outer Melbourne suburbs are experiencing an oversupply of the same type of property and usually are in growth corridors where more land and housing supply is prevalent. If we look at some of the outer areas in terms of available properties for sale – Cranbourne has 795, Melton 549 and Doreen has 912. Compare these volumes to suburbs where demand is outstripping supply like Elsternwick – 47, Yarraville – 69 and Balwyn with 81 currently on the market and you can begin to see why these areas are seeing strong demand, multiple bidding and price growth. Uniqueness of property, property type, scarcity and location are all factors playing a major role in demand from buyers. Based on this, yes there is a ripple effect we are already beginning to see which is reaching the outer suburbs and has seen days on market fall form 150 days to 45 days however this hasn’t been reflected in strong price growth as supply appears to be an issue still. Regards, Peter

    April 01, 2014 @ 9:57 am

    Reply

  3. Angela @ Double Bay Conveyancing said...

    I really believe just looking at auction clearance rates is too one dimensional. I run a conveyancing business in frankston and would suggest auctions are less than 10% of my work. I attribute this to several reasons but most importantly the fact most buyers like the security of private treaty where they can purchase subject to finance and a building and pest inspection. Must say I am the busiest I have been since 2010 and most around this area are saying the same. Prices seem to be rising but not at ridiculous levels and all in all I feel the market is going nicely

    April 02, 2014 @ 7:56 pm

    Reply

    • Peter Sarmas - Street News said...

      Thanks for your comments Angela. The auction clearance rates are meant to reflect and be a barometer for the Melbourne property market. However auctions only account for only 20-25% of total sales, the remainder being private sale. Depending on the area, whether that be a first home buyer market, new or investor market and the demand and supply of that type of property in that area usually dictates the preferred method of sale. Its good to hear things are going along well in the Frankston area.

      April 07, 2014 @ 10:50 am

      Reply

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