Top end rides interest rate cut Sunday's sales
The Reserve Bank of Australia's move last week to cut the cash rate a further 25 basis points to its lowest recorded level is helping fuel the moves.
Three of the four major banks cut their interest rates by 25 basis points by the end of last week with ANZ going further, making a 27-point cut.
RT Edgar director Jeremy Fox said he felt a boom brewing.
"The moment they drop interest rates so low, the market moves, slowly at the beginning, but then it accelerates," he said.
In Malvern, five bidders vied for the right to demolish an ageing 1980s house at 8 Haverbrack Avenue, which sits on a 1134-square-metre block of land.
The property was sold under the hammer, through RT Edgar, for $4.39 million, nearly $400,000 above its reserve price of $4.01 million.
It was not alone. In Canterbury, four bidders pitched for a tired property at 2 The Ridge on an 855- square-metre allotment, pushing it past the $2.12 million reserve to sell under the hammer for $2.41 million.
Jellis Craig director Alastair Craig said the property was somewhat overshadowed by the new house next door at No. 4 that recently sold for more than $6.5 million.
"I suppose if you're paying $2.5 million for the land and spending another $2 million on the house, it makes sense," Mr Craig said.
"When there's low interest rates it's a great opportunity for people to upgrade in the market and it's never been more affordable," he said.
Other big deals sealed during the week include an apartment at the former Mercy Hospital redevelopment opposite Fitzroy Gardens in East Melbourne where apartment 705 fetched around $6.2 million through RT Edgar.
The three-bedroom apartment had been purchased off-the-plan for $5.45 million in 2009 by Carroll & Richardson Flagworld director James Richardson.
RT Edgar also sold an Arts and Crafts-style 1930s property in Toorak at 73 St Georges Road for $5.6 million. The house, on 1488 square metres, had been on the market for some time.
It was matched by another early 1930s house at 20 Heyington Place in Toorak that was sold for slightly less per square metre after auction on Saturday. Home to the Brookes family (descendants of prime minister Alfred Deakin), it was sold for about $6.2 million. It sits in the middle of a large 2043-square-metre garden block and could receive either a lavish extension or face demolition.
The auction, handled by RT Edgar and commercial agents Allard Shelton, was slow to get started and RT Edgar director Warwick Anderson had to wait 15 minutes to get a bid. It was passed in to the second bidder for $6.05 million.
Sunday’s sales
CAULFIELD NORTH
PI 9A Sebastopol St B 9rm 396sqm $1,460,000
lo $1,500,000 res $1,620,000 Wilson Glen
Eira
ELWOOD
SO 2/13 Glenhuntly Rd B 3rm $556,000 Pride
Real Estate
SO 4/13 Glenhuntly Rd B 3rm $560,000 Pride
Real Estate
GLEN HUNTLY
SO 4/4 Wattle Av B 4rm strata $567,500 Wilson
Glen Eira
ORMOND
SO 63 Malane St 6rm $1,150,000 hockingstuart
ST KILDA EAST
SO 3/4A Meadow St B 5rm strata undisc Gary
Peer & Associates
Frequently Asked Questions about this Article…
The RBA cut the cash rate by 25 basis points to a record low, and three of the four major banks passed on 25bp cuts (ANZ cut 27bp). That lower-rate environment helped fuel activity at the top end of the market, with cashed-up buyers competing at auctions and paying millions to knock down older houses and build new ones, prompting agents to say a boom may be brewing.
With interest rates lower and borrowing more affordable, some buyers are willing to buy large, well-located blocks and either renovate or demolish and rebuild. Agents in the article pointed out that paying a premium for land and then investing in a high-end new build can make sense when mortgage costs are low.
Examples from the article include: 8 Haverbrack Avenue, Malvern (1,134 sqm) sold under the hammer for $4.39 million; 2 The Ridge, Canterbury (855 sqm) sold for $2.41 million; apartment 705 in the former Mercy Hospital redevelopment, East Melbourne, fetched about $6.2 million (originally bought off-the-plan for $5.45m in 2009); 73 St Georges Road, Toorak sold for $5.6 million; and 20 Heyington Place, Toorak sold for about $6.2 million.
The article shows mixed auction dynamics: several properties attracted multiple bidders (five bidders in Malvern, four in Canterbury), indicating strong demand in some cases, while other auctions were slow to start and could be passed in to a second bidder (as happened in Toorak). This suggests pockets of competitive buying at the top end rather than uniform activity across every property.
'Sold under the hammer' means a property was sold at auction to the highest bidder on the day. A reserve price is the minimum amount the seller will accept; several reported sales went above reserve—for example, the Malvern property sold for about $400,000 above its $4.01 million reserve.
RT Edgar handled multiple high-end sales mentioned (including the Malvern and East Melbourne deals) and worked alongside commercial agents Allard Shelton on at least one Toorak auction. Other local agents and firms named in the Sunday sales list include Jellis Craig, Wilson Glen, Pride and hockingstuart.
Agents in the article expressed optimism: RT Edgar director Jeremy Fox said he felt a boom brewing and that the market accelerates after deep rate cuts. Jellis Craig’s Alastair Craig also noted that low interest rates create an opportunity for buyers to upgrade. While these comments point to increased top-end activity, they reflect agent observations rather than a formal market forecast.
Based on the article, investors should keep an eye on further interest rate moves by the RBA and major banks, upcoming auction clearance and bidder numbers, prices relative to reserve levels and price-per-square-metre comparisons in premium suburbs, and whether more buyers choose demolition-and-rebuild opportunities on large blocks.
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