Melbourne property market making up for lost time
Off the back of a few weeks of 70% plus auction clearance rates, the property market in Melbourne is humming along nicely. In some cases, prices are surpassing historical records. The auction system is working well for the experienced agents and, as a general rule, the scales seem to be tilted in the favour of the seller – if the property is correctly priced.
Many agents have commented that when a new property lists, it is inundated with enquiry and inspection requests the first week. If the buyer isn’t in that first enquiry mix, the property is more likely to take quite a while to sell.
Ready to move in homes are driving market success. Houses don’t have to be perfect in terms of current renovation, but they need to have a good floorplan with the right mix of rooms and good outdoor spaces.
The desire to have one large open plan living area is not quite as high on the list as it previously may have been. COVID-19 lockdown has proven that breakaway rooms and studies are required for a family to function effectively for a long period of time in the home – particularly if there are a number of parties needing privacy for calls or zoom meetings. Bedrooms work to an extent for separation; however, it can become quite depressing if you are resigned to being in your bedroom all day and night.
Hampton, a market that has been particularly strong and forgiving of properties’ faults for many years now, faltered over the weekend. A number of properties advertised with ranges inside $2-2.5million were auctioned and passed in – 40 May Street, 122 Linacre Road, 108 Ludstone Street and 35 David Street (David sold later). Why? We think the homes had compromises – on offer were a mix of homes with orientation, slope, mixed levels, busy road and narrow road issues. Most needed more money spent on them to improve in some way.
We mentioned in our June blog https://www.woledgehatt.com.au/20-june-2020/ that buyers were making decisions around lifestyle, in particular relocating to more rural areas such as the Mornington Peninsula, as working from home looked like becoming more acceptable post-COVID-19 and into the future.
It appears that the same decisions may also be being made more locally by buyers still wishing to stay closer to family, schools, work etc. However, this is more around the offering of the home itself rather than the position first.
Highett has been considered the more affordable suburb to Hampton. 21 Haynes Street auctioned on the weekend. The property offered a quiet street, pretty façade, single-storey living, good bedroom separation, multiple living zones plus a study, along with a pool and outdoor entertaining area. While the Hampton properties struggled to find a bidder collectively on the weekend, 21 Haynes attracted six bidders, pushing the price to $2.1 million.
A similar property in Carnegie, not quite as current but with an equally functional floorplan, saw four bidders push the price to $2 million.
We are not saying these properties were poorly located. On the contrary, both were in good positions with an easy walk to local shops and the station. What we have noticed, however, is that some buyers are choosing the better home in the slightly lower priced suburb over the suburb first.
On the building front, renovations are becoming more expensive, often with unknown surprise expenses once you start. Of course, good planning and advice is key to avoiding surprises – many people we hear set off on the wrong foot (i.e. are poorly advised) and therefore fall into big trouble many months on. With the possible future economic uncertainty, quantified amounts seem to be preferred, particularly in certain price brackets. And it pays to get good advice from a qualified architect.
What do we expect for the rest of the year? We think a slow down as we edge closer to Christmas – but that may not be until December 24! Since the market resumed, agents have had to change how they manage their time. Private inspections and then strict number limits have meant many more hours have been spent at properties (compared with the typical 2 x 30 minute set times of the past), leaving less time to focus or the need to work longer hours to get everything done. The recent buying activity has meant more sellers looking to ‘test’ the market through a soft campaign (i.e. digital only). Traditionally, many agents like to be spending the next few weeks selling what is already on the market and with far fewer sales for this time of the year, compared with previous years, it is likely many will look to put 2020 behind them, and launch in early 2021. That’s not to say there won’t be any off-markets now; we have bought four in the past five days. Two were completely ‘off market’, the other two via a ‘blast email’ from the agency database. There are opportunities out there, you just need to know where to look and who to ask.
Some of the better properties currently on the market; an architect’s view
12 Sorrett Avenue Malvern – Abby Innes / James Tomlinson, Marshall White
18 Pasadena Avenue Beaumaris – Alex Schiavo / Eleisha Doherty, Kay & Burton
- Californian Bungalow looking for update, over 1,000sqm, Malvern East – circa $3m
- Two storey family home with north rear, ~700sqm, Malvern – early $3m
- Brick Edwardian, ~600sqm, north rear, Malvern – high $3m
- Updated Victorian weatherboard, single level, Malvern East – circa $2.4m
- 1940s single level, family home, ~520sqm, Elwood – circa early $3m
- Double fronted Victorian, single level, Canterbury – circa high $3m
- Californian Bungalow with a north rear, Hampton – circa high $2m
- Hawthorne brick, 2 storey Victorian, ~1500sqm, Hawthorn – circa $10m
- Victorian single fronter, 2-1-0, north-west rear, St Kilda – circa $1.3m
- Family home, corner position, overlooking park, Sandringham – circa $2.3m
- Large art deco home over two levels, Brighton – circa high $4m
- Modern family home with pool, Brighton East – circa $3m
- Californian Bungalow, near central park, Malvern East – circa $3m
- Contemporary family home, good land, pool, Hampton – circa early $3m