Auction clearance rates rebound

A cyclist, on his way to the shops, beat three other bidders to buy a renovated weatherboard house in Melbourne's west at the weekend.
By · 14 Oct 2013
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14 Oct 2013
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A cyclist, on his way to the shops, beat three other bidders to buy a renovated weatherboard house in Melbourne's west at the weekend.

Jas Stephens agent Terry Fitzpatrick was conducting the auction of 34 Darnley Street, Braybrook, when the cyclist, straddling his bicycle, joined the auction.

The three-bedroom house fetched $521,000, off a reserve of $510,000 and well above the $400,000 median house price for the area. The cyclist then got back on his bike to go home for the deposit, trailed by Mr Fitzpatrick in his BMW.

Jas Stephens director Craig Stephens said "the vibe in the west is good, with the peripheral suburbs like Braybrook showing good results".

The market on the weekend recorded a strong 76 per clearance rate from 826 auctions reported to the Real Estate Institute of Victoria, while research house RP Data struck 73.8 per cent from 883 auction results and Australian Property Monitors (owned by Fairfax Media) posted 76 per cent rate from 569 results.

Sydney struck an 86 per cent rate from 480 auctions, according to APM, with a median price of $900,000, considerably higher than the $760,000 median house price in Melbourne.

However, there are a further 143 results to be reported to the REIV, which could bring down the final clearance rate. The previous weekend saw an initial 71 per cent slip to 70 per cent after all the results were tallied.

Despite the strong results, some vendors and agents are nervous enough to take an early offer, with 112 properties selling before auction. And of the 201 properties that passed in, 107 did so on a vendor's bid.

Two auctions, held within 30 minutes of each other in Brunswick Street, Fitzroy, reveal some of the vagaries in the market. The first house at No.41, put to auction by Woodards, was an upmarket, renovated, seven-room boarding house with a special 1B registration. Agent Lisa Roberts quoted between $1.7 million and $1.9 million for the double-storey terrace, built in 1856, which could return $102,000 a year in income if fully leased.

However, any potential investors in the crowd kept their hands down and the property was passed in at $1.75 million with no bids emerging. A later offer of $1.8 million was rejected.

A few doors away, the unrenovated No.29 was on offer and that is where potential home buyers had focused their attention. Built in 1881, the five-bedroom house was on 307 square metres and offered as a mortgagee auction.

The crowd nearly doubled for this auction and Chambers director John Costanzo fielded bids from four parties, starting at $1.3 million. It was on the market at $1.55 million and sold for $1.61 million to a buyer with a keen interest in historical properties.

One of the biggest prices achieved on the weekend was for Norrac, at 23 View Street, Hawthorn, which fetched $3.15 million. The grand Italianate villa was also built in 1881, for timber merchant James Wright, and stood on 1340 square metres of land off Auburn Road. The vendors had lived in the house since 1964.

McLaren director Bruce Bonnett said there were heritage constraints on the property and the land alone would have sold for that price. The auction attracted about 300 people but only three bidders.

Mr Bonnett said bidding opened at $2.5 million and it was declared on the market at $2.85 million.
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