Strong market sees record highs
Buyers, sellers, agents, analysts and reporters woke on Saturday morning with an air of optimism as the Melbourne property market hosted the largest auction weekend since the pre-Covid days in early 2020. They weren’t disappointed. Traditionally the end of February is the first big weekend of a new year, as it is four weeks since school resumed and campaigns can run uninterrupted.
There was an 84% clearance rate and some of the highest results we have seen. This is not just compared to pre-Covid; many properties sold at levels higher than the highs of 2017.
Many quotes were smashed, sometimes by more than 20-30%, such as:
- 62 Kinkora Road Hawthorn – quoted $4.7-5m, selling for $6.55m
- 37 Gladstone Street Sandringham – quoted $1.9-2.09m, selling for $2.78m
- 17 Dalmor Avenue Ormond – quoted $1.6-1.7m, selling for $1.967m
- 58 Alfred Street Prahran – quoted $1.6-1.76m, selling for $2.25m
- 26 Parslow Street Malvern – quoted $3-3.3m, selling for $3.675m
- 36 Campbell Street Brighton – quoted $2.9-3.1m, selling for $3.5m
For many buyers, it will be back to the drawing board. For the moment there are three options:
- Find more money
- Move to a suburb (or two) further out
- Be prepared to accept a less comfortable home
With the first option perhaps being the hardest for many buyers, recalibrating the search area and the property non-negotiables may be the best option for success.
We are encouraging our clients to be flexible with the property, with the knowledge that it can become what they want down the track. This isn’t always easy to determine. Having an architect on board certainly makes it easier to focus on the B graders that can turn into A graders. Not all homes can become what you want/need and some can cost a lot more money to achieve the same outcome. Buying well is important – and sometimes passing on properties is important too, as many properties are just not worthy (or possible) of a renovation.
On a brighter note for buyers, many homes currently on the market are likely to see an updated Statements of Information this week. Where it has been hard for agents to find sales within 2km, in the last six months, this is now no longer the case.
This could help buyers make better decisions around their chances of success, as some of the due diligence undertaken requires financial outlay such as contract checks or pest and building inspections with no certainty of success.
We saw many homes on the weekend sell with 3, 4, 5 or more bidders vying for the keys. That would suggest there are still multiple buyers searching for their new home. With the stock levels for ‘the right homes’ still very low, we don’t expect to see much change to the current market sentiment.
Of course if vendors suddenly decide that they want to sell and expect that the market will see 10% plus increases each week, the market could very quickly start to see some more pass-ins, as buyers may not be able to keep up with their expectations.
Open for inspections were also very popular on the weekend, with some agents recording groups of 50 or more on the well-presented and marketed homes. Are stock levels low? Well, not really if you look the numbers; however, the buyer numbers are so great now (i.e. those that still haven’t bought from last year, expats coming back and also many ‘new’ buyers), the demand is certainly outweighing supply.
Some of the better properties scheduled for Auction; an architect’s view
11 Lyall Street Hawthorn – Campbell Ward/Peter Vigano, Jellis Craig
6 Lileura Avenue Beaumaris – Errol Driver/Jim Kalogerakis, Hodges
- Land opportunity, wide north frontage, approx. 682sqm, Toorak – circa $6.6m
- Fully renovated brick single fronter, 2-1-0, South Yarra – circa $1.2m
- Art Deco family home, pool, DLUG, fully renovated, Ripponlea – circa mid $4m
- Renovated single level brick Edwardian, 3-1-1, Prahran – circa $2m
- Contemporary, dated, family home, approx. 700sqm, Hampton – circa $2.3m
- Brick period with modern rear, 3-2-2, Elwood – circa $2.3m
- Land with plans for dual occ or family home, Camberwell – circa $2.25m
- Golden mile family home on approx. 360sqm, Brighton – circa $3.7m
- Brick Edwardian semi on approx. 400sqm, Glen Iris – high $1m
- Modern family home on over 700sqm, Glen Iris – circa $4.7m
- Renovated 80s family home, Malvern East – circa $4.7m
- Single level renovated home, Hawthorn – circa early $2ms
- Gascoigne Estate, family home, two storey, Malvern east – circa $4.75m
- Updated single level home, Malvern – circa $5m
The home on offer at 46 Retreat Road Hampton ticked many boxes for families looking in the area – a well presented updated home with a good range of spaces. It’s proximity to shops and the suburb’s amenities, coupled well with the park only one door away. As a bonus, the playground is currently undergoing a major redevelopment.
The auction was late in the day, so a buzz of expectation was palpable in the crowd, having seen some strong results at auctions earlier in the day. The opening bid was placed at $2.3m, matching the lower end of the quote range. From here it quickly went up in $50,000 bids, picked up another bidder, dropped the first and exceeded the reserve of $2.6m. More bidders stepped in, although offers now ranged between $1,000-$10,000. The home was very nearly knocked down at $2.736m before a bid was placed in the very last second before the contract hit Halli’s hand. This brought forth a flurry of activity, with neither of the last two parties willing to give up the keys to the home. The property was eventually sold for $2.872m to enthusiastic applause from the crowd. A reasonably strong result for the offering we think.