Melbourne Auction Results – May 11th

Rising auction clearance rates this year have predictably translated into solid price growth.

A clearance rate of 81 per cent was recorded this weekend compared to 79 per cent last weekend and 68 per cent this weekend last year.

There were 904 auctions reported to the REIV this weekend, with 732 selling and 172 being passed in, 78 of those on a vendor bid.

The top auction suburbs this year with median prices under $500,000 were Mill Park (83 per cent), Noble Park (79 per cent) and Lalor (78 per cent). Each of these suburbs had more than 30 auction sales this year.

Melbourne Market Fires Up On Rate Cut

For two weeks in a row after the April holidays and with nearly one thousand properties auctioned a clearance rate of 80 per cent has been achieved The Melbourne property market hasn’t been this strong for nearly five years, since December 2010.

Rising auction clearance rates this year have predictably translated into solid price growth. Melbourne’s median house prices increased by 2.2 percent over the March quarter to a new record high of $638,448. This was the strongest quarterly rate of growth for the Melbourne market for a year with annual house prices rising by 6.6 percent. Melbourne’s unit prices fell marginally by 0.3 percent for a median of $434,436 for an increase of 2.3 percent over the year.

Last week the Reserve Bank of Australia made the decision to cut the cash rate again by 0.25 per cent to a low of 2 per cent, the lowest rate since the early 1960′s. Immediately the ANZ led the charge and passed on the the rate reduction to its customers. Unfortunately the same could not be said for the remaining big four who decided to keep some of the cut for themselves and did not pass on the full amount. Most mortgage holders, and new ones to be, would be happy at the thought of lower repayments, but the reality and reason for the latest cut is that our economy is flagging and performing below the RBA’s band of 2-3 per cent growth- so not all good news.

Photo Source: RealEstate.com.au

On The Street

The latest round of interest rate cuts seems to have really sparked some sort of frenzy in certain areas and for certain property types. I witnessed some staggering auction results over the weekend that even surprised the real estate agents. Melbourne’s East continued its strength with some very strong results.

Barry Plant Doncaster sold under the hammer number 5 Jacks Place Doncaster for over $1.5mil which was more than $200,000 above the vendor’s reserve. Sale results in the East continue to defy the odds as foreigners (many Chinese) undeterred by the recent state and federal stamp duty announcements continue to pay a premium for property in these areas. Unsurprisingly, once middle class, these suburbs have now become neighbourhoods for the wealthy as median house values reach over $1 million. Suburbs like Doncaster, Glen Waverley and Mount Waverley are now commanding big prices for 3 bedroom homes, some in original condition.

According to a recent Credit Suisse analysis, some $60 billion more is set to be invested in property by Chinese foreigners over the next 6 years, specifically in the city of Melbourne and Sydney. So where and when will this property surge end? Not anytime soon. What I do know is that I haven’t seen such strength and multiple bidding for a very long time. Could it be that Melbourne prices will begin to inflate to such levels as they have in Sydney? Maybe some Melbournian’s fear median prices may hit Sydney’s median price of $917,000? We certainly look cheap in comparison.

Another example of a strong market was in Melbourne’s Northern suburbs where I witnessed the sale of 156 Cameron Pde, Watsonia Nth. On a main road and with its rear yard abutting the local primary school, this property expected to fetch in the early 500’s, had 12 bidders push it over $600,000 to reach $625,000 in front of a crowd of 100 people. Fifteen years ago you would struggle to sell a similar home for $120,000.

What’s interesting is areas such as Watsonia, Greensboough, Bundoora and Macleod are experiencing a renewed demand from first time buyers due to their price point – sub $600,000. In areas such as these where demand is outstripping supply, prices are being driven higher.

It seems first time buyers are searching properties in Melbourne’s “middle suburbs” those 15-20 kms from the CBD close to instracture like trains, transport, schools, freeways and shopping centres. All important in today’s time poor society.

Top 5 Houses

1. 40 Anderson Road, Hawthorn East $4,820,000
2. 11 Flintoft Avenue, Toorak $4,350,000
3. 53-63 Bridge Street, Port Melbourne $3,690,000
4. 11 Peppin Street, Camberwell $3,510,000
5. 15 Bridge Street, Hampton $3,100,000

Top 5 Bargain Houses

1. 3 Crossley Crescent, Coolaroo $235,500
2. 14 Elizabeth Avenue, Werribee $248,000
3. 54 Gillingham Crescent, Craigieburn $271,000
4. 19 Mudie Avenue, Sunbury $281,000
5. 2 Medinah Close, Sunbury $307,500

Top 5 Apartments

1. 43A Thanet Street, Malvern $2,106,000
2. 61B Iona Street, Black Rock $2,000,000
3. 2/11 Tollington Avenue, Malvern East $1,855,000
4. 17 Princes Street, Port Melbourne $1,450,000
5. 5/86A Marine Parade, Elwood $1,420,000

Top 5 Bargain Apartments

1. 4/119 Jetty Road, Rosebud $220,000
2. 21/294 Nicholson Street, Seddon $240,000
3. 5/18 Currajong Street, Thomastown $244,000
4. 3/16 Lawn Crescent, Braybrook $272,500
5. 4/12 Barry Street, Reservoir $297,500

Source: REIV