Melbourne Auction Results – June 15th

In what’s known in the industry as “jawboning”, the RBA’s governor is attempting to talk down the property market and insight fear into potential property investors in an effort to cool the market.

A clearance rate of 80 per cent was recorded this weekend compared to 72 per cent last weekend and 70 per cent this weekend last year. There were 781 auctions reported to the REIV this weekend, with 624 selling and 157 being passed in, 68 of those on a vendor bid.

The 2015 auction market hit a peak in May, with 5,000 auctions held – more than any other month this year. The May clearance rate at 79 per cent was also well ahead of May 2014 , when it was 71 per cent.

Bubble Trouble – The Reserve Bank Weighs In

Recent bubble talk by Glenn Stevens, the governor of the Reserve Bank, describing property prices in Sydney as ”crazy” and the current boom as “acutely concerning”, seems to be having little affect on Melbourne’s and Sydney’s property markets, both recording strong clearance rates of 80% and 90% respectively.

In what’s known in the industry as “jawboning”, the RBA’s governor is attempting to talk down the property market and insight fear into potential property investors in an effort to cool the market. A number of agents I have spoken to have not seen any negative impact so far in Melbourne or Sydney markets.

Economist Shane Oliver reports that jawboning has worked in the past when the then RBA governor Ian Mcfarlane, talked down the market in 2003 and 2004 and Sydney prices fell – he believes it will work this time as well. Mr Oliver is of the opinion that this type of continual rhetoric changes the mindset of investors and will eventually take affect, it just takes time.

This all sounds good in theory but it seems the message isn’t getting through to property investors who are out in force buying up a storm. Recent figures released by Digital Finance Analytics show that more than half of first home buyers in NSW and one in three first home buyers in Victoria are investors. Director Martin North expects that for the first time, more first home buyers will be investors than owner-occupiers by the end of this year.

The large concentration of investment properties are beginning to affect the new and established apartment market with recent figures showing growth for rental values at its lowest rate for some time according SQM Reserach.

The clear dangers we see in this current environment when buying an investment property are:

• Will you find tenants relatively quickly?
• If you need to reduce the rent will I still be able to make the repayments?
• Are you buying a property which is in a highly concentrated investor area?
• Can you expect capital growth in this area for this type of asset?
• Are you mitigating risk through income protection and insuring against rising interest rates.

On The Street

Tracking feedback from our current and past clients we have noticed a trend. Nearly all of our vendors had previously had a bad real estate experience with an agent on a previous sale, which is really unfortunate.

So too was the case in our latest vendor advocacy role in Donvale. We were engaged to advise our vendors on how to maximise the selling price of their property. We methodically inspected the whole property, pointing out what needed to be done to help achieve the maximum price for their home.

Apart from standard maintenance issues like painting, some landscaping and general cleaning, one of the first things that I suggested needed changing was the front post and wire fence which was not easy and cheap fix.

Photo Source: www.barryplant.com.au

Being on an acre and a lifestyle property, our vendors hadn’t even considered that such a fence would be detrimental to their sale price. After a second opinion from our stylist Anna, the owner’s put their trust in what we told them and made the change. As first impressions are so important, this one change had an enormous impact on the street appeal of the property.

We then interviewed the three most active agents in the area and, in consultation with the owners, selected the best agent for the sale. We decided to sell the property using an expression of interest campaign rather than private sale or auction, as demand for lifestyle properties is different in the “hot” Manningham market.

With a strong digital and local paper marketing campaign and a bonus “house of the week” write up, we managed to attract a number of buyers willing to pay above the advertised price range.

The end result was a phenomenal $400,000 above the vendor’s top price and any agent’s estimation. Needless to say everyone was thrilled with the result and our vendors are now able to downsize and move onto their next stage of life, to build their dream home on their new land. Unlike their previous experience the sale of their home this time was above and beyond their expectations!

Top 5 Houses

1. 50 Montclair Avenue, Glen Waverley $5,505,000
2. 39 Lambeth Avenue, Armadale $4,660,000
3. 27 Summerhill Road, Brighton East $3,980,000
4. 29 Regent Street, Mount Waverley $3,300,000
5. 32 Barrington Avenue, Kew $3,150,000

Top 5 Bargain Houses

1. 115 Glynns Road, North Warrandyte $85,000
2. 42 Mt Eagle Way, Wyndham Vale $265,000
3. 1/4 Dawn Avenue, Dandenong South $275,000
4. 3/70-71 Nepean Highway, Seaford $285,000
5. 11 Donald Street, Dallas $295,000

Top 5 Apartments

1. 7 Lawson Street, Hampton $1,770,000
2. 3A Abergeldie Avenue, Mckinnon $1,387,500
3. 6/7 Warwick Court, Surrey Hills $1,380,000
4. 61 Michael Street, Fitzroy North $1,250,000
5. 1/56 Union Road, Surrey Hills $1,229,888

Top 5 Bargain Apartments

1. 4/232 Nicholson Street, Footscray $207,000
2. 3/483 Princes Highway, Noble Park $278,000
3. 7/37 Osborne Avenue, Glen Iris $280,000
4. 5/7 Waltham Street, Flemington $285,000
5. 12/63 Ulupna Road, Ormond $296,000

Source: REIV