Traditional buying seasons blurred as market remains hot
It has been an interesting two weeks. For the first time since we can remember, we have attended auctions on the middle and last weekend of the ‘Easter’ holidays, as well as a number of new campaigns showing their first inspection at the start of the holidays, rather than the end.
For those who may be less familiar, the Melbourne market is usually broken into four quarters, defined by the school holidays. But this year that seems to have been put aside and, while auction numbers were lower than the last couple of weeks in March, they were considerably higher than we would normally expect.
According to the REIV, this weekend had 907 auctions reported, with a clearance rate of 86%. Compare this to the same weekend last year, with only 149 auctions held and you can clearly see the change in holiday activity.
With May this year featuring five Saturdays, the auction selling system for sellers is well catered for. At the end of this period, we should get a good understanding of where things are at.
Selling a home can be expensive (advertising, staging, storing of furniture etc). In the past, agents and vendors have been reluctant to auction properties or commence new campaigns while much of their target market is on holidays. It appears that this year, the agents were either confident that no one was going away or there were enough buyers around that even if some were away there were enough remaining to create a competitive marketplace.
After attending some of the first opens and auctions (with inclement weather), we can confirm that this was correct. Many properties had large crowds and/or queues to inspect.
Buyer numbers are still increasing. Two main reasons why (we think) are:
A number of local residents are coming to the realisation that even if they don’t want to work from home, it may be forced upon them. With a number of larger corporations restructuring or making plans to sub-let their floorspace, employees who were working from home in makeshift spaces (ie bedrooms, kitchen benches or tables etc.) are realising they are going to need a bigger/more functional home as the changes become permanent.
Expats coming back need somewhere to live. Australia is becoming increasingly desirable as other countries battle to get the virus under control. For those who have been living overseas, sometimes for 10 years or more, they are now returning to Australia, often with partners and/or extra children and often with deeper pockets.
Most property inspections we are attending feel more like a party line-up than a home inspection. The streets are lined with parked cars and there are queues (prior to the open time) of people waiting to get in the door.
Many buyers are making decisions out of fear and believe that buying something is better than buying nothing. Money is still ‘cheap’ and looks to remain that way for the foreseeable future. Unless history changes, however, rising markets (at some stage) come to an end and in the event things don’t turn out as planned, buying the wrong property now may cost more than waiting for the right one to come along in the future.
Some of the better properties scheduled for Auction on 8 May; an architect’s view
48 Kerferd Street, Malvern East – John Morrisby/Sarah Sharp, Jellis Craig
1 Wolseley Grove, Brighton – Nick Renna/Andre O’Brien, Jellis Craig
- Townhouse, renovated, central South Yarra – circa $2.25m
- Victorian family home on approx. 630sqm, Hawthorn – circa $3.5m
- Large, renovated, Art Deco on good land, Elwood – mid $4m
- Californian Bungalow on over 750sqm, north rear, Glen Iris – circa $2m
- Contemporary home, approx. 1,200sqm, Hawthorn – circa $9.0m
- Victorian home w. 2 studios at rear, pool, Balaclava – circa $2.4m
- 2 bed Townhouse with north courtyard, Ripponlea – circa $1.2m
- Family home in the Castlefield Estate, Hampton – circa mid $2m
- Contemporary family home, pool, Hampton – circa $3m
- Updated townhouse, 3-2-1, Windsor – circa $1.3m
- Single level 3 bed home, prime Brighton East – circa $3.4m
- Modern family home, tennis court & pool, ~1,300sqm, Surrey Hills – circa $5.3m
- Development opportunity, Activity Centre, dual access, Highett – circa $1.65m
- Double fronted Victorian on approx. 400sqm, Prahran – circa $2.85m
- Californian Bungalow, heading work, over 950sqm, Hampton – circa $3m
- Large family home, 3 levels, pool, Brighton East – circa $6m
- Modern family home, very close to beach, Sandringham – circa $4.5m
- Edwardian home on approx. 1,300sqm, tennis court & pool, Brighton – circa $12m
Immaculately renovated and presented, the single level home at 2 Killeen Avenue Brighton East was always going to be an attractive option for downsizers. Proximity to St Leonard’s College would also bring in smaller families. While Matthew Pillios from Marshall White had plenty of location benefits to talk about, the crowd was hesitant to start things off. After placing a vendor bid of $2.0m, it took some time for a bidder to offer $2.025m. More silence led to a lengthy ‘half-time’ break. The vendors were clearly hoping for more (the home had been advertised at $1.95-2.1m), but no further bids were forthcoming. The property was passed in, later selling for $2.265m. A good result for the seller we feel.