Summer Sales Wrap
With the clearance rate hovering around the 70% mark on good auction numbers (over 1,000), the Melbourne property market is still holding firm. There has been a lot of talk about how rising interest rates will affect and bring down market values significantly – however, within the markets we work in and the buyers we represent, we don’t see that happening – at least not yet.
We do concur that bidder numbers, auctions and attendance numbers at open for inspections have dropped since the end of 2021. The numbers in 2021 were unprecedented and the current market feels more ‘normal’ to us, with the frenetic activity we witnessed last year less likely to be repeated.
We have noticed a number of vendors believe (or would like to believe) that the market is still continuing to rise on a weekly basis, however, we also note many of the vendors of this opinion, currently remain home owners awaiting a sale.
Having said that, there have been some very solid results occurring across town. Some of the more recent sales of great family homes and ‘A’ grade land include:
Some of these include:
- 17 McKinley Avenue, Malvern – renovated family home high $5millions
- 12 Soudan Street, Malvern – renovated family home circa $6million
- 28 Deakin Street North, Hampton – approx. 427sqm, corner block, $5,304sqm
- 17 Carew Street, Sandringham – only 429sqm approx., selling for an historic high square metre rate of $5,855 for the area
The good quality land and ‘ready to move into’ family homes are still few and far between, resulting in strong competition if priced correctly.
The properties that are struggling a bit more appear to be the homes requiring work, where they are too good to knock down, but no longer practical for current living.
With renovations and building costs escalating more recently, this has been creating quite a lot of angst and confusion for buyers.
Why do we think costs are escalating? Declining numbers in the workforce, delays due to natural disasters here in Australia (the floods have affected transportation of materials and equipment), escalating material costs due to reduced shipping (i.e. a lot of timber and other building supplies come from overseas) and a real shortage in appliances are amongst some of the reasons. A simple ‘volume build’ house that used to take six months – can now take twelve months or more.
For a long time, we have supported buying a ‘B’ grader that could turn into an ‘A’ grader with a few tweaks or simple renovation, as a good way to enter and get ahead in the Melbourne property market. We still believe that is a good plan, IF you are prepared to live patiently in the house (possibly 2-3 years) until you can find a good builder who can start the work and you have a good understanding of the potential costs of the works to be done.
Two properties that recently failed to sell at auction that are good example of ‘B’ graders that could become ‘A’ graders are 14 Valley View Road, Glen Iris and 7 Finlayson Street, Malvern. Both have the strength of a period façade, supported by reasonable land content, however, they are both dated inside. We think these and homes like these can provide opportunities for buyers, however, the decision needs to be properly thought through and thoroughly researched.
Looking forward, post Easter and school holidays, May is normally a very strong time in the Melbourne market, however, with the upcoming federal auction we may see a pause or slowdown until buyers and sellers are confident they know where the country is heading.
Depending on the outcome, there could be a few solid weeks of listings and auctions, however, June is broken up again with the Queen’s Birthday long weekend, followed by the mid-year school holidays which commence again on June 24th. We could see quite a stop/start period coming up, keeping some confusion or uncertainty for all parties navigating the market.
Off markets? We are hearing increasing numbers of homes around quietly for sale and whilst some can be good opportunities, many are overpriced and/or not really for sale and a lot of time can be spent chasing something that was never available in the first place.
There is an element of romance for buyers who relish in the chance to say they bought an ‘off market’ home. Most are really old-fashioned ‘private sales’ without the media advertising or board, just with a ‘fancy name’ to make it sound more appealing.
We say, buying the right home (regardless of the method of sale) is always a better decision.
A ‘B’ Grader looking to be turned into an ‘A’ Grader; an architect’s view & concept
14 Valley View Road, Glen Iris – John Morrisby/Bree Scott, Jellis Craig
‘Off market’ or ‘pre-campaign’ Properties:
- Lower maintenance downsizer property, great location to amenities, Sandringham – circa $4m+
- Period home with Heritage Overlay requiring renovation, ~800sqm, Brighton – circa high $4m
- Beach Road luxury townhouse, 4-3-3 with basement, Sandringham – circa $3.7m
- Single level downsizer, walk to amenities, Brighton – circa mid $2m
- New home site, near Golden Mile, ~680sqm – circa $5m
- Large modern family home, walk to schools/shops – circa $7m+
- Renovated period family home on approx. 600sqm, Malvern East – circa high $2m
- Pretty, renovated single fronted 3 bed home with OSP, Prahran – circa $2m
- Updated period home, 3-2-2, close to amenities, Armadale – circa $4m+
- Townhouse style standalone home, near Central Park, Malvern East – circa $3m
- Double fronted Victorian, 4-3-2, Armadale – circa high $4m
- Luxury home with multitude of mod-cons, 3-3-2, Prahran – circa $3.5m
- Two storey terrace home, 3-4 beds, Middle Park – circa $3.4m
- 1930s large family home on over 1,000sqm, Kew – circa $6m+
- Single level family home on over 700sqm, Glen Iris – circa $2.7m