Pent-up demand gets season off to a strong start
THERE are early signs of growing confidence in the property market with two consecutive weekends of strong auction results starting off the new year.
The Real Estate Institute of Victoria reported a clearance rate of 69 per cent yesterday from 204 reported auctions, a substantially better result than the 54 per cent rate reported for the corresponding weekend at the start of 2012 and the 56 per cent for 2011.
While 63 properties were passed in (35 of them on a vendor's bid) over the weekend, there are still 48 results outstanding.
Those results regularly shave a couple of points from the final clearance rate. Last weekend's initial 71 per cent result was downgraded to 69 per cent.
Veteran agent Greg Hocking said pent-up demand from last year and the December interest rate cut by the Reserve Bank of Australia might be having an impact on buyer confidence.
"It may flow into this year, especially given that the RBA decided not to cut again last week after seven cuts in a row. And the stockmarket is up on last year," Mr Hocking said.
Williams Batters director Philippe Batters said there was a big increase in confidence compared with last year.
"People are making offers now whereas last year, they would just wait and see," Mr Batters said.
"People are sick of having cash and they are putting it into the stockmarket or property. I have one client who says 'money has to sweat' and it's not sweating with the interest rates [for cash] that the banks are offering," he said.
While agents have reported multiple bidders at auctions, increased inquiries and attendances at inspections, some of the top results for the weekend were achieved with a single bidder.
Mr Hocking put 6 Moule Avenue in Brighton to auction on Saturday morning, opening with a $2.4 million vendor bid. It was met with a genuine bid of $2.42 million and the property was passed in and sold after negotiations for $2.55 million.
In Point Lonsdale, Kerleys Coastal Real Estate sold a beach house three doors down from the beach at 5 Kirk Road, for $1.26 million after negotiations with a sole bidder.
However, across the bay at Frankston South, a mortgagee auction for 18 Yamala Drive attracted three bidders and sold under the hammer for $2.065 million.
McEwing Partners director Dean Phillips said a genuine bid of $1.6 million started the auction, which went up in $100,000 bids until it reached $2 million.
There was plenty of activity back in town. Mr Batters sold an apartment at 3/168 Toorak Road West in South Yarra for $1.172 million under the hammer after competition from two bidders.
The first bidder attempted a knockout bid of $1.14 million to begin the auction and the property was immediately put on the market, he said.
Despite recent incremental price rises across Melbourne after two years of price deflation (0.7 per cent according to the Australian Bureau of Statistics), some purchasers picked up well-located properties at the lower end of their price ranges.
Jellis Craig sold a renovated three-bedroom unit at 4/1203 Burke Road in Kew, close to the private school belt for $701,000 with bidding from five parties.
And a double-fronted unrenovated Victorian house on 300 square metres at 171 Nicholson Street in trendy Abbotsford fetched $772,000 with strong competition from three bidders.
Sunday’s real estate sales
SO 210 Centre Rd B 6rm 603sqm $1,015,000 Buxton
SO 18 Yamala Dr DB 14rm 3196sqm $2,065,000 McEwing
SO 65 Malane St WB 6rm 663sqm $915,500 Buxton
PI 3 Shelly Ct v/land 1336sqm $1,100,000 VB res undisc
Kay & Burton