Vendors Remain Optimistic
Sellers are ignoring falling house values.
Melbourne’s property market has felt the brunt of another big auction day, with 806 properties up for sale around the city.
The Real Estate Institute of Victoria reported a clearance rate of 61 per cent for the 690 auction results collected so far.
The outcome of 116 scheduled auctions has not yet been reported. But if recent trends hold true, the sales level will fall at least a couple of percentage points further. Last weekend’s clearance rate was downgraded from 61 per cent to 59 per cent.
The market has now experienced nearly six consecutive weeks of 800-plus property listings and, with about 1000 set for each weekend until Easter, it marks an almost unprecedented stock level for this time of year.
While vendors appear confident enough to keep bringing properties to market, the latest price figures from RP Data-Rismark will sound a warning to those who remain a little too confident in their price expectations.
Melbourne house values dropped 2.2 per cent in the February quarter. Unit values declined by 0.5 per cent. (In comparison, analysts Residex put the decline for houses at 0.19 per cent, while units underwent no change over the same period. So the exact degree of the downward price movement is disputed.)
”We had been seeing a pretty balanced dynamic in the market, with supply and demand at roughly the right sort of levels. But now we’re seeing the supply of properties exceeding demand,” said Paul Nugent, director of Wakelin Property Advisory. “I don’t think we’re going to see buyers’ demand taking up property at the level hitting the market now.”
But even with so much on offer, there were enough committed buyers out there to produce some strong results yesterday.
In Blackburn, an old-fashioned auction slugging match broke out over 1/16 Tyrrell Avenue — a 1940s four-bedroom house that attracted more than 140 bids, some in $50 increments.
Ray White Blackburn said two bidders pushed the price from an opening $620,000 to $700,000, where it was declared on the market, with the hammer finally falling at $760,300. It was quoted at $650,000-plus.
A slow start looked set to put a quick end to the auction of 4 Beamsley Street, Malvern, where no one was willing to offer the opening bid of $2.4 million requested by RT Edgar.
However, after a vendor bid was placed at $2.3 million, two genuine bidders took over and drove the price up to $2.65 million, where it was declared on the market. And the action still wasn’t over, with the five-bedroom 1970s property eventually selling for $2,710,000.
A five-way competition developed over 7/179 George Street, East Melbourne, which sold for $920,000 off a reserve of $800,000. Bennison Mackinnon quoted the three-bedroom apartment at $750,000-$810,000.
In Kew, the four-bedroom period house at 7 Malin Street sold for $1,451,000 after being declared on the market at $1.2 million. Jellis Craig quoted it at $1.1 million to $1.2 million.
About 80 people turned up for 24 Sunnyside Avenue, Camberwell, but the five-bedroom period home failed to attract any real interest. After a call for an opening offer around $2 million elicited no response, Marshall White ended the auction.
The three-bedroom Edwardian at 7 Oban Street, South Yarra, opened on a vendor bid of $1.8 million and attracted just one genuine bid of $1,825,000 before passing in through Marshall White. “It was sold for $2.15 million, which is an amazing result, considering that it passed in for $1,825,000,” said Michael Ramsay, of Michael Ramsay Property.
”You’d have to wonder what would influence a buyer to pay an extra $325,000 after an auction with arguably no competition at all.”
There are 980 auctions scheduled next weekend.
source: Domain, Chris Vedelago, April 4, 2011
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