What did we learn during 2019 about the Melbourne property market?
As 2019 comes to an end, buying a home in one of the world’s most liveable cities remains a challenge.
We believe a combination of factors have contributed to this.
The first half of the year was cautious, as vendors and buyers waited for the outcomes of both the Royal Commission into banking and the Federal election.
Both these decisions provided a much-needed confidence injection for buyers to transact and, off the back of a long winter break, they found themselves competing fiercely for the limited supply of good properties.
Second-tier banks such as ING, Suncorp, Bendigo and Macquarie, eager to increase their market share, worked proactively with buyers to fund and improve their buying capacity, resulting in more buyers ready to transact and at higher levels than earlier in the year.
Unlike 2017, where it felt like buyers were prepared to stretch on almost every property for sale (even those with multiple compromises), discretion has remained for the moment. This has contributed to a larger gap in the prices between the ‘A’ graders and others.
We are also now seeing a number of homes sell above 2017 prices.
The good properties (well located, functional, ready-to-move-in homes) remain few and far between, which has contributed to a sense of FOMO (fear of missing out).
We believe low stock levels are here to stay. Vendors who enjoy where they live are tending to stay if the location works.
Where it may have been more common in the early 2000s to move every 5-7 years, rising prices have also contributed to higher stamp duty taxes. $110,000 stamp duty on a $2 million purchase is likely to cover a new kitchen/bathroom upgrade for most.
The typical property cycle of the past has also changed.
Where, when a buyer bought, they generally replenished the market with something to sell, we are seeing less of this happening, as many buyers now are new to Melbourne with nothing to sell.
Our early expectations for 2020, at least until Easter, are that if the good-quality stock is in low supply, buyers will continue to face challenges finding and buying the right home.
2020 will be the prime time to get in contact with a professional buyers advocate if you are looking to snap up a property. Get in contact with WoledgeHatt Buyers Advocates and start your journey today.
Highlights:
- 56 Berkeley Street Hawthorn (Tony Nathan, Woodards) – a basic original house on just under 700sqm in a signature street and within illustrious company, quoted $2.5m plus, sold strongly for $3.66m
- 32 Adelaide Street Armadale (Justin Long/Fiona Counsel, Marshall White) – two storey, renovated semi attached home in a quality street close to High Street shopping strip, quoted $2.7-2.97m, sold for $3.35m
- 37 Page Street Albert Park (Simon Gowling/Max Mercuri, Greg Hocking Holdsworth) – renovated two-storey period home with pool and secure OSP for one car, sold for an undisclosed amount above $4m
- 38 Wright Street Bentleigh (Trent Collie/Nick Renna, Jellis Craig) – early 2000s modern home, ready for an update in places, backing onto Allnutt Park, quoted $1.95-2.145m, sold strongly for $2.52m
- 3 Bamfield Street Sandringham (Stephen Wigley/Kylie Charlton, Hodges) – a corner square block of 601sqm, with a large but dated Californian Bungalow ready for work or possible replacement given the ‘A’ grade location, quoted $2.35-2.45m, sold for $2.62m
One of the better properties scheduled for auction on 14 December 2019; an architect’s view
58 Bamfield Street Sandringham – Greg Costello/Justin Hocking, RT Edgar
“Off Market” Properties:
- Ground/whole floor apartment, one of two, 3-2-2, South Yarra, early $3m
- Single fronted Hawthorne Brick, 2 bed, 1 bath, Windsor, circa $1.3ms
- Renovated Edwardian family home, 4-2-2, Brighton, circa $3.25m
- Renovated Edwardian, close to Church St, 4-2-2, Brighton, circa early $3m
- Edwardian two storey family home w. pool, 4-2-2, Caulfield North, high $2m
- Renovated home, good location, pool, 4-2-2, Hampton, circa $2.7m
- Modern Townhouse, 4-4 & basement garage, Hawthorn East, circa high $3.9m
- Renovated & extended period home, 3-2.5-2, Hawthorn, circa $5.5m
- Brick period home seeking renovation, approx. 530sqm, Malvern East, circa $3m
- Edwardian brick semi, extension plans, approx. 220sqm, Prahran, circa $1.4m
Auction Spotlight:
25 Sims Street Sandringham
The crowd delivered five bidders at the successful auction of 25 Sims Street Sandringham
25 Sims Street Sandringham is one of those uncut gems that offers a multitude of possibilities. The original Edwardian home could be brought back to life with an all-encompassing renovation. Without restrictive overlays, however, the home was also appealing to developers, keen to take advantage of the north rear and ‘A’ grade position.
Paul Bond headed up the Hodges team throughout the campaign and on auction day. Neighbours turned out in force to see what the property’s future might bring, as well as a strong attendance of buyers. Customary silence followed the preamble, making Paul place a vendor bid of $1.8m which kickstarted two parties bidding. Announced on the market in the mid $1.9 millions, a third bidder entered proceedings as bidder one stepped out. Bidder two (a young couple, planning on renovating the existing home) stayed strong, now trading bids with a fourth party who offered $1000 each time to their $9k. They managed to hold off this bidder; however, when a fifth party joined the auction at $2.1m, their capacity was eventually exceeded, the property knocked down for $2.221m to the successful party.
28 Elphin Grove Hawthorn
Scott Patterson had the sun shine on the garden setting of his auction at 28 Elphin Grove Hawthorn.
A small crowd of about 20 people gathered in the tranquil backyard to witness this auction. Well located and on good land (approx.. 855sqm), the home had been tastefully renovated. The flats in the street and lack of garaging had the potential to limit interest, however, in a market with limited stock three bidders took stage to fight it out. Auctioneer Scott Patterson looked for an opening bid and, after a bit of time, found one at $3.1m. Not long after, bidder two came into play and things tracked along quite slowly with mainly $5k bids. At $3.46m, the property was announced on the market, with bidder three coming into play as bidder two dropped out. Ultimately bidder one prevailed with the final price settling at $3.701m. A fair result for buyer and seller alike.
