Are things the same or are they different?
So much is the same, and yet many things are now different and could have an impact on the future direction of the property market:
- Some banks have started to increase their fixed term interest rates.
- Increases in stamp duty coming into effect (yet to be approved by the Victorian Parliament).
- Increases in land tax coming into effect (yet to be approved by the Victorian Parliament).
- Future building work costs are likely to increase due to a shortage of materials, skilled tradespeople and labourers.
- Changes to the Residential Tenancy Act are now in place.
The second quarter results have been solid, with strong clearance rates consistently over 80%. There are some continued unexpectedly strong results: some compared to the quotes, which are often still based on 2020 comparable properties, and others where buyers have decided they’ve had enough and are prepared to spend more to get off the merry-go-round of inspections and auctions.
- The finished product is still in high demand – stock levels remain low and many buyers don’t have the time, skill or inclination to tackle renovations.
- Some homes are seeing fewer inspection numbers. Is this because there are fewer buyers, some quotes are more accurate or are some properties just not in demand?
- Apartment blocks (one owner of the land and all the apartments) seem to be coming up for sale on a weekly basis at the moment; for example 37 Hope Street South Yarra (17 one-bedroom apartments) had been in the one family since 1986. Sitting on approx. 462sqm, it had flexibility for buyers as a new home site, boutique apartment or to update it as it is. Quoted $5.5-6m, it sold in excess of $6.6m at a mid-week auction.
- Off market properties are increasing, particularly for homes that have been rented for a period of time and are needing work.
- Many properties are selling before the scheduled auction date, although the majority of these are still competitive (often just bringing the auction date forward).
- Some vendors have raised their expectations above current market prices.
- Quotes are more confusing than ever for buyers – some are now very accurate and some are still absurdly low and buyers can be missing opportunities because they are relying on the quote too much to make decisions.
- Many vendors have decided to hold off selling because they’re not sure what they can buy.
- There are also a number of agents who have said they already having listings for Spring – if supply increases, this could further temper the current.
- Some homes (usually the move-in nothing-to-do homes) are still attracting four, five or more bidders, while others are now seeing only one or two. As buyers for these homes thin, the clearance rate may start to drop as more homes have the potential to pass in if the reserves are not met.
What does all this mean for buyers still wanting to buy? We think it could create a little more uncertainty generally. Price increases are likely slow down and current levels will become the new normal. Methods of sale, away from auction, particularly for poorly presented homes, may increase.
When do we think these changes may become more noticeable? Probably after the mid-year holiday break. Most schools will have two or three weeks holiday across late June/July and historically agents have taken the opportunity to recharge before the Spring market returns.
Although, perhaps like Easter, there may not be a definitive break and auctions will continue across the holidays.
- 9 Margarita Street Hampton – Jenny Dwyer/Steve Tickell (Belle Property) – renovated period home with pool, good street, approx. 770sqm, west rear, quoted $4.2-4.5m, sold for $5,050,000.
- 11 Kingsley Street Camberwell – Campbell Ward/Cameron Edgoose (MarshallWhite) – single storey (comfortable but could be further improved) period home with pool, approx. 710sqm east rear, quoted $2.9-3.1m, sold for an undisclosed amount circa $4m.
- 6 Gray Court Beaumaris – Campbell Cooney/Greg Ward (Hodges) – approx. 994sqm, south rear, large family home (circa 2000 in pretty original condition), quote $2.6-2.86m, sold for $3.36m.
- 48 Kerferd Street Malvern East – John Morrisby/Sarah Sharp (JellisCraig) – approx. 682sqm, period home ready for next renovation/extension, quoted $2.6-2.86m, sold for an undisclosed amount over $3.8m.
- 16 Cavendish Place Brighton – Chris Hassall/Todd Dixon (Buxton) – approx. 602sqm, solid brick, circa ’70/’80s home in original condition, ready for renovation or rebuild. Quoted $2.0-2.1m, sold for an undisclosed amount over $2.65m.
Some of the better properties scheduled for Auction the first weekend of June; an architect’s view
23 Gladstone Parade Elsternwick – Bill Stavrakis/Angelos Stefanis, Biggin & Scott
33 Dorrington Avenue Glen Iris – Hamish Tostevin/Justin Krongold, Marshall White
- Family home, weatherboard, approx. 690sqm, Beaumaris – circa $2.2m
- Brick single fronter, 2-1-1, approx. 170sqm, East Melbourne – circa mid $2m
- Two storey terrace, 3-2-1, busier road, East Melbourne – circa high $1m
- Single level, 5-bed family home, ~960sqm, Brighton East – circa $4.4m
- Edwardian family home, single level, pool, Malvern East – circa early $4m
- Gascoigne Estate, Federation home, ~540sqm, Malvern East – circa mid $5m
- Single level Victorian, approx. 930sqm, Toorak – circa mid $8m
- Fully renovated family home w court & pool, ~1860sqm, Hawthorn – circa $14m
- Corner land site, approx. 657sqm, Camberwell – circa mid $2m
- Victorian single fronter, scope to improve, ~120sqm, Prahran – circa $1.3m
- Period home needing major reno, Heritage overlay, Glen Iris – circa high $1m
- Edwardian brick single fronter, approx. 306sqm, Caulfield North – circa $1.7m
- Double fronted cottage, approx. 233sqm, Richmond – circa early $2m
16 Cavendish Place Brighton attracted a large crowd, who were here perhaps not only for the coffee van, but also the opportunities on offer for this original, yet neatly presented, ’70/’80s solid brick home. The property is ready for an update or potential rebuild on the approximately 602sqm of east rear land. Commercial properties along the north boundary could have held back potential buyers, but the numbers on auction day seemed to show differently. Perhaps the flexibility of the office space or potential self-contained unit at the front of the home enticed a broader range of buyers. The property had been quoted $2.0-2.1m. With the crowd spread far and wide on both sides of the street, the opening offer of $2.5m surprised many and immediately put the property on the market. Four further bidders joined proceedings swiftly, before most stepped out again almost as quickly. The final two continued to push for the keys, with the home eventually selling for an undisclosed amount over $2.65m.