Melbourne Auction Results – June 29th
Auction sales have continued to track higher with around 14,000 sales so far this year, the highest on record. The outer Melbourne region experienced the strongest auction sales growth in the year to date, up 20 per cent from the same time last year.
A clearance rate of 79 per cent was recorded this weekend compared to 77 per cent last weekend and 73 per cent this weekend last year. There were 782 auctions reported to the REIV this weekend, with 621 selling and 161 being passed in, 62 of those on a vendor bid.
Clearance Rate: 79%
Reported Auctions: 782
Sold at Auction: 507
Passed in: 161
Sold Before: 113
Sold After: 1
Auction Volumes: $555.45m
Last Weekend: 955
Last Year: 758
Houses: 83%
Units: 74%
The Bubble Predictions Which Cost Buyers Money
With all the bubble talk and an impending property crash just around the corner (don’t worry I am being facetious) I thought it was time to revisit the spruikers who, by sheer publicity, stopped many home buyers from plunging into the Melbourne property market, in effect costing them 20-30% price growth. This graph below, courtesy of Australian Property Forum outlines some of the most outrageous predictions since 2001.
Source: photobucket.com
What disturbs me the most in all this is the media who heavily promoted and ran sensationalist style articles about these forthcoming crashes. Why haven’t they revisited and interviewed these so called experts to ask them “what actually did happen and why their predictions were so wrong?” I mean they weren’t talking about the market falling 10-20%, there was almost a hysteria that the whole of the Australian property market would actually collapse.
At least one cycle of 7-10 years is the minimum length of time you should look at owning a residential asset.
I guess the question that should be asked is “why were these people making these predictions” and what are the repercussions now for getting them so wrong. It also gives every property owner a reality check as to who they should listen to when it comes to buying property.
Owning property should be a long-term play, at least one cycle (7-10 years) is the minimum length of time you should look at owning a residential asset.
Last week saw the release of the Corelogic RP Data’s Pain and Gain March quarter report. This report should be of great interest to all who have an interest in the Australia property market. The report highlights the gains and losses made over the quarter, comparing the most recent sale price of a property sold to the previous sale price, to determine whether the property sold at a gross profit or loss.
Over the March 2015 Quarter 9.1% of the homes sold recorded a loss, which was slightly higher than those recorded towards the end of 2014, however this number was lower than for the same quarter last year. The total loss was $417 million which meant the average loss per property equated to $70,000, not exactly chump change!
On the plus side, over 90% of properties which sold over the same period did so at with a profit with 30% selling for more than double their purchase price, according to Corelogic RP Data. The total value of profit was $13 billion, translating to a whopping $230,633 profit per property sold, not bad!!
The data also supports our view that property must be entered into as a long-term play. Stunning to see were properties which resold at a loss had an average ownership of 6 years. While those sold at a profit had an average ownership of 10 years and those which resold for more than double their previous purchase price were held for 16.8 years – better have time in the market than trying to time the market.
Capital city areas continued to show lower loss-making resales than regional areas or country, while property prices in mining towns continue to rapidly deteriorate.
In closing I leave you with this. Will property prices slow and even fall in some sectors of the market? Yes, like every asset cycle there is a boom and bust however, Melbourne has seen a sustained 7% growth in property prices for the past 20 years according to Core Logic RP Data researcher Cameron Kusher.
Can we predict a downturn coming? Definitely not! For those who believe they can, I would ask “why are you still working?” I would also be interested to know how many of those above who predicted each crash actually sold up all their property assets? Property is not like shares and therefore I believe should not be treated as such, at least not in Melbourne and Sydney markets anyway.
When should you buy a property? Buy a property or an investment when you can afford to buy one and focus on something that will appreciate in value over a long period of time, as well as pay part or all of your mortgage bill.
Finally, as of July 1st we launch our new Street Advocate website and business officially.
For anyone wanting to know more about property we are giving you the opportunity to have a free chat over the phone or a face to face over coffee with yours truly!
Just email me on peters@streetadvocate.com.au or call on 0418 740 606
Cheers!
Top 5 Houses
- 1269 High Street, Malvern $4,780,000
- 20 Studley Avenue, Kew $4,580,000
- 2 Terama Court, Glen Waverley $3,625,000
- 27 & 29 Clyde Street, Box Hill North $3,565,000
- 1A Monomeath Avenue, Canterbury $3,500,000
Top 5 Bargain Houses
- 10 Rokewood Crescent, Meadow Heights $264,000
- 26 Lady Penrhyn Drive, Melton West $279,000
- 2 Princess Place, Melton West $292,000
- 8 Lidgerwood Close, Hoppers Crossing $330,000
- 1 Nourell Court, Meadow Heights $332,000
Top 5 Apartments
- 360 Koornang Road, Carnegie $1,308,000
- 1/603 Inkerman Road, Caulfield North $1,301,000
- 68B Lyons Street, Carnegie $1,280,000
- 88 Esplanade West, Port Melbourne $1,255,000
- 4/47 Little Palmerston Street, Carlton $1,230,000
Top 5 Bargain Apartments
- 306/32 Bray Street, South Yarra $216,500
- 7/1264 Glenhuntly Road, Carnegie $260,000
- 1/31 The Crossway, Keilor East $275,000
- 1/9-11 Ross Street, Coburg $280,500
- 19/1 Kitmont Street, Carnegie $289,000
Source: REIV
