November 19, 2016
Observers of Melbourne’s property market have been talking about the boom for several years. The intensity shows no sign of letting up, with buyers in 2016 increasing the intensity levels at auctions up yet another notch. The REIV reported an 80% clearance rate on the 976 properties auctioned this weekend.
We believe this booming demand is not attributable to one single factor but a combination of several, such as more expats returning home, downsizers with increasingly strong budgets (and poor performing super funds), heavy interest from overseas buyers (especially from China), rising frustration for first-home buyers and strong local investment interest.
Many buyers who began the year looking at properties are still searching, attending opens and trying to find the elusive right property within their budget that will allow them to finally enter the market.
This demand is pushing buyers into areas they may not previously have considered and we are seeing some very strong results in areas we haven’t before, such as 9 Mount View Avenue in Parkdale. This was an updated home, with a north rear with good garaging and lifestyle options on 711sqm (approx.). Situated on the east side of the Nepean Highway, where 12 months ago a result over $1 million was considered strong, it sold on Saturday for $1.815m.
Buyers who have felt they can no longer afford to buy where they want and have moved their search further out are in part leading these strong results, as they are taking their higher budgets with them, unaware of where the property may actually sit in the overall Melbourne market.
Of course, if you’ve bought your dream home, price can very quickly fade into a distant memory. If down the track, however, you realise the home is not what you want or where you need to be, it can be very costly to start the process again, particularly if the market is not a booming one such as we are currently experiencing.
Another risk that buyers should watch out for in this racing market is the recently renovated home. Buyers should ensure they undertake full diligence to make sure no shortcuts have been taken, so there are no unwanted surprises once you have moved in.
- 9 Mount View Avenue Parkdale (Katrina O’Brien/Mathew Cox, Buxton Mentone) – updated original home with good lifestyle options, car garaging and north rear – $1.815m
- 23 Flowerdale Road Glen Iris (Anny Perry/James Redfern, Marshall White) – modern three-level home with prized north-facing rear in a desired local street – $3.84m
- 30 Barkly Avenue Armadale (Andrew McCann/Carla Fetter, Jellis Craig) – single-level home with south rear, sold back in 2011 for just over $1.8m, this property demonstrates the demand for well located, good single level homes – $2.641m
- 20 Victory Street Sandringham (Amanda Jones/Paul Bond, Hodges) – approx. 694sqm, west rear, basic home probably requiring major renovation in the future; however, some saw it as a new build site – $2.142m or $3,086sqm
- 29 Myrniong Grove Hawthorn East (Tomny El-Helou/Caroline Hammill, Woodards) – approx. 858sqm, north rear with no heritage overlay – $3.53m or $4,114sqm
- 6 Serpentine Street Mont Albert (Pat Dennis/Danielle Balloch, Jellis Craig) – approx. 701sqm, north-facing rear – $1.815m or $2,589sqm
- Single storey, double-fronted period home – Hawthorn – over $2m
- Modern home – Toorak – $7m plus
- Three-level renovated home – Glen Iris – circa $3.5m
- Free-standing brick Edwardian – Armadale – over $3.5m
- Period home, good land (around 800sqm) – Malvern – over $5.5m
Properties we like, schedule for auction December 10:
18 Soudan Street Malvern
Picture perfect conditions at this well renovated, single level brick Victorian home in Soudan Street Malvern. This home was well located, with an easy walk to the train station and local coffee shops – Millstone and Café Claremont to name two. Auctioneer Jack Bongiorno gave his usual, spirited preamble and then kicked the auction off with a vendor bid of $3.8 million. Not long after, an Airbus 380 flew overhead impressively low, which takes the focus off Jack and bidders for a brief moment, before the auction kicked back into action. After consulting with the vendor, the property was announced on the market at $4.2m. Three bidders in all took part here , and the property sold under the hammer for $4.24m to the original bidder.
105 Willis Street Hampton
Stephen Tickle from Hocking Stuart held the auction at 105 Willis Street in the sunny rear garden, tempting everyone with a dip in the pool as proceedings heated up. The large family home boasts a contemporary style, with an extensive list of technology and designer fittings. Bidding opened at $2.65m, rising steadily before stalling a $2.91m. After a half-time break with the vendors, three bidders eventually pushed the price past reserve before all were trumped by a single knockout bid of $2.98m from the successful buyer.
20 Victory Street Sandringham
The beautiful gum trees on Victory Street Sandringham provided sought-after shade for auction attendees at number 20. Paul Bond from Hodges espoused the many benefits of the location, including the option of renovating or rebuilding, before proceedings started. A strong opening bid of $1.8m was quickly built on by back and forth bids between two bidders. Once the first bidder stepped out, a third – and eventually the winning – bidder joined the auction. A solid finish of $2.142m for the ecstatic buyers.
Agent Opinion: What is your outlook for the early part of 2017?
Jenny Dwyer, Hocking Stuart: As we head into the new year, people are now starting to reserve auction spaces for February and March to take advantage of the ‘pre-Easter’ market. There is the expected continued demand from buyers left disappointed by the legacy of this spring market, where supply has been unable to meet demand.