Saturday was a record breaking auction day for the month of March in Melbourne with over 1700 auctions called.  On Saturday evening only 1455 of these had been reported to the REIV with a 75% clearance rate, the remainder perhaps hoping to be sold after before reporting in.

The talk at the moment is all about stock – or the lack thereof.  In the key areas we focus in (Stonnington, Bayside, Boroondara and Port Phillip councils), agents are all in agreement that stock for late April/May is likely to be less than the last couple of years.

With very little stock presenting until mid-April, buyers may find opportunities with some of the current ‘passed-in’ properties, however, it is important to keep in mind your property goals and ensure these are met before buying something just because it is available, cheap or convenient.

Whether stock levels will improve as we move into winter (which can sometimes be low anyway) is yet to be determined.  This may result in further pressure for buyers all vying for the same, limited, stock.

We have seen a number of good quality ‘off market’ properties for sale this year for buyers to consider.  Where we bought less than 20% of homes for clients last year ‘off market’, we have purchased close to 40% this year.  There are still some good properties out there, they are just a little harder to find.

Off market properties can often be sold in isolation (i.e. one lone buyer/no social proof), which can sometimes lead to buyers paying well above ‘market’ value for properties.  Great for vendors, however, not so great for buyers if they find their circumstances change unexpectedly and they need to sell.  Having a good understanding of the area, the relevant results and why and the property’s flexibility (different buyer groups the property may appeal to and different uses) can help.

Auction highlights:

Focusing on properties offering specific appeal for ‘downsizers’ – single storey, off street parking, walking distance to shopping precincts/transport, this weekend continued with good results:

Land Sales:

Off-markets:

Auction Spotlight:

39 Duke Street, Windsor (Mark Wridgway, RT Edgar), sold $4.85m

A huge crowd gathered outside the historic former “Red Lion Hotel” – converted into an incredible family residence with five bedrooms, three bathrooms and rooftop garden, deck and pool just metres to cosmopolitan Chapel Street. When the last of the crowd wandered out of the home and into the street, Mark Wridgway started proceedings and called for an opening bid. With the rumble of the Formula 1 cars in the background, an offer of $3.6m came from the crowd. Bidder 2 entered the competition and bidding from here on came thick and fast. By the time Mark declared the property on the market at $4.325m, there were four bidders in the mix. At the eleventh hour, Bidder 5 entered the fray and bidding continued steadily until the hammer came down at $4.85m to a round of applause from the appreciative crowd.

19 Bates St, Malvern East (John Morrisby, Jellis Craig), sold after auction in the early $3ms

With a striking green canopy enveloping Bates St, auctioneer John Morrisby stepped out before the crowd of around 50 people and delivered a succinct preamble before asking for an opening bid. All was quiet, so John tabled a vendor bid of $2.8m. Bidder 1 jumped in at $2.825m, and then Bidder 2 with another $25k rise. At $3m, John headed inside to refer to his vendor, and with no further bidding on the day, the property was passed in for further negotiations. It sold soon after for an undisclosed amount.

Properties we like, scheduled for auction:

Agent Opinion:“With so many holidays and interruptions in the first quarter, we have seen low stock levels across the board. Do you anticipate there will be an increase in stock levels after the Easter break/school holiday period?”

Bill Stavrakis (Biggin & Scott): “As a result of the low interest rate environment and the liquidity in the local market (Glen Eira, Bayside, Port Phillip, Stonnington and Boroondara) we are seeing many purchasers acquire property and hold their current home and add it to their real estate portfolio’. On the other hand there is also the ‘ passive buyer’. The segment of the market that wants to either upgrade or downgrade and currently owns their own home and will only sell if and when they purchase. Now the problem there is that they can’t find a suitable home to purchase and as a result they are not listing theirs on the market? Far from ideal. Kind of a ‘chicken and egg’ scenario.”

We’d like to take this opportunity to wish everyone a safe and happy Easter. With the market slowing down for the school holidays, we will be back with another edition of Market Pulse in a few weeks.