Solid sales lift market hopes for a recovery
Auction clearance rates cranked up another notch with the end of school holidays, lifting hopes of a recovery in the property market.
The weekend's auctions produced a clearance rate of 70 per cent from 511 results reported to the Real Estate Institute of Victoria; 154 passed in, 97 of those on a vendor's bid. A remaining 43 results are yet to be reported.
The results were spread solidly across the city although some areas are still ailing. The clearance rate for house auctions in the west was 58 per cent and some suburbs in the south also struggled - in Cheltenham, there were two sales from six auctions.
However, the inner suburbs with larger numbers of auctions mostly tended to score better: seven from seven auctions in South Yarra and eight out of nine in Richmond.
The confident result followed the release of the quarterly March figures by the REIV that showed the strongest start to the year in more than 10 years.
The REIV reported a 5.1 per cent rise in the seasonally adjusted median price to $561,500. That number is derived from a raw figure showing a 0.9 per cent decline in the median to $545,000. But the March quarter is usually the weakest and the REIV now seeks to iron out the seasonal differences with these measures.
But the improvement is coming off a sluggish base and after some tough years of which we are only just seeing the end. The two properties that fetched the highest prices over the weekend were put to auction by their mortgagees.
Four bidders fought briskly for 75 St Vincent Place in Albert Park, which sold for $4.3 million after bidding from four parties.
The terrace is one of three - 73, 75 and 77 - that were bought from the Loreto Property Association (associated with an order of the Catholic Church) by Fiona Olney-Fraser, wife of corporate raider Darren Olney-Fraser, in 2008 for $10.1 million. Westpac took control of the properties in 2010.
Cayzer director Michael Szulc had expected more than $3 million each for the unrenovated properties but the bidding on the day was stronger than anticipated. "It started with a genuine bid of $3 million and it did not break at all ... It was a dream auction. There are two more auctions to go for No.73 and No.77 so maybe the underbidders can have another go."
In Alphington, in the inner north-east, Miles Real Estate sold 2 Rowe Street under the hammer for $3 million after slow bidding by three parties. Traralgon-based mortgage provider La Trobe Financial Services had taken control of the sprawling 1920s property following a property development venture that went awry. Avalon, which is on 11,500 square metres of sloping land along the railway bridge to the Darebin Creek, was purchased by the opening bidder, a neighbour who intends to retain the property.
Buyer's advocate Frank Valentic said lower interest rates and lower prices were driving buyers' renewed enthusiasm for the market, especially investors.
"If interest rates went up 0.5 per cent, that would change the whole market. But right now, prices are lower and interest rates are lower so people think they're not buying at the top of the market but at a more reasonable time of the cycle," Mr Valentic said.
Some good results are also coming well out of the inner suburbs. Nearly 20 kilometres west of the city in Laverton, a tired weatherboard house at 13 Donald Street sold for $409,000. Ray White Laverton agent Ben Waywood said four bidders had their hands up for the property, which is on 739 square metres of land.