Winners and losers in Melbourne’s multi-tiered market
Melbourne’s multi-tiered property market has highlighted the winners and losers in the game, at one of the biggest auction days for the year last Saturday.
We do not believe the weekend’s reported clearance rate of 76% accurately reflects what is actually happening in the market. Many properties are now being withdrawn from auction, often due to no buyer interest, or the auction result is not reported, meaning these figures are therefore excluded from the final results.
For this half of the year, the properties we’ve been monitoring are consistently circling the 55% mark. Granted, we are focusing on homes over $1 million within the key councils of Melbourne, including but not limited to Bayside, Port Phillip, Glen Eira, Stonnington, Yarra, Darebin and Boroondara, where not every home is auctioned.
From our record, we were pleased to see the clearance rate for those properties on Saturday at 60%; however, this is well below the advertised 76% being pushed into the market.
A number of homes sold before auction this week (particularly in Balwyn, where there were no ‘live’ auctions). While some of these sales may have been because there was only one party interested, others were over-run with buyers and there were some very strong results reported, such as 37 Elizabeth Street Malvern. It was quoted $6-6.6 million and received an early offer, which induced a board room auction. Five parties pushed the price to an undisclosed price comfortably above $8 million.
Quoting remains a problem for buyers, with many finding themselves ‘swimming in the wrong pool’ time and time again, missing out on homes they think they can afford. Or buyers do not understand the type of property they are competing for. For example, on the weekend, a well updated original family home on a very large allotment in Surrey Hills went up for auction. Those looking to live in the home (which was perfectly fine) or even extend it in the future simply could not compete with the majority of buyers, who were looking to knock it down and start again.
Properties which are going well:
- ‘Land’ which is not attached with a heritage overlay, particularly in Boroondara (most agents will highlight this on advertising) i.e. 5 Elliott Avenue Balwyn sold last week for around $3.4 million (or just under $5,000/m2 – huge result for the area).
- Well renovated period or new homes that have a good balance of bedrooms/bathrooms/car accommodation, in good streets.
- Single-storey, low maintenance ‘downsizer’ homes.
- Properties where key buyers do not necessarily require financing.
Properties which are struggling:
- Dated period homes on sloping sites, and/or attached with a heritage overlay and/or having large trees that cannot be removed.
- Modern homes with quirky floor plans /fit-outs.
- Properties where key buyers do require financing and have been affected by rising cost of living expenses.
We hear so many buyers when we are out and about lamenting about ‘low quotes’, yet they change nothing to achieve a different outcome when trying to purchase their home. Without research and a plan, the likelihood is they will keep failing, or ultimately buy something sub-standard with their budget just to get the job done.
In addition, council valuations remain an issue for vendors. While traditionally councils would be on the conservative side with their assessments, more often lately we are hearing of very high assessments which do not make sense in the current market for what the property really is. Naturally a vendor would rely on the council information (as it is in writing and comes from an authoritative source) and frame their pricing thoughts accordingly – more often than not though currently it just doesn’t help when it comes to sell … and vendors struggle (or simply don’t), sell.
Understanding the nuances of the Melbourne market is a full-time job for most people working in the industry. If you find you’re not having success and don’t want to give up any more of your weekend to research and learn more, it might be worth engaging someone to assist with the process.
There is a small break now for Cup Week(end) before the last of the campaigns for 2024 commence. With only six ‘good’ Saturdays left for the year, there is really only another month for vendors to get their properties prepared and online. The alternative is February 2025 and that, for some, will seem like a long way away at this stage.
For buyers, that means there is a good chance you could be starting 2025 still looking for your new home. Now is an easy time to make a mistake. Good agents will recognise your eagerness to purchase before the end of the year, convincing you to relax your requirements and accept sub-standard properties for your price bracket just to get the job done before Christmas.
Yes, that may be a great relief; however, rushing to buy the wrong property can ultimately lead to dissatisfaction, stress and possibly the desire to resell and try and get it right next time. The onflow effect of this is more stress and a lot more costs, including advertising, agents’ fees and more stamp duty fees. The cost can be emotional and financial.
For the last six weeks, we expect to see an increased number of ex-rental properties for sale and for younger buyers, or first-time buyers, there should be some good opportunities if you are prepared to take on some of the maintenance tasks and upgrades that many of these properties require. Some of these are located in the best precincts of some of Melbourne’s most desired suburbs. It can be a great opportunity to break into these areas at more affordable price points.
Family homes in the $3-4 million range are in high demand but low supply, as are single storey homes, particularly suitable for downsizers.
As an example, 5 Garden Street Hampton, a single storey with an older renovation, yet still comfortable home, on 639sqm approx., quoted $2.25-2.35 million, sold for $2.672 million with eight bidders.
Some of the better properties currently on the market; an architect’s view
5 Emo Road Malvern East – Jack Moss/Justin Long, Marshall White
9 Campbell Street Kew – Nick O’Halloran/James Scoones, Jellis Craig
24 Haydens Road Beaumaris – Kate Fowler/Spiro Vasiliadis, Jellis Craig
‘Off-market’ Properties:
- Renovated family home, 5-5-5, pool, ~1030sqm, Hawthorn – circa $8.4m
- Brick semi-attached, 3-2-2, ~460sqm, Hawthorn East – circa $2m
- Modern 5-4-5, pool, ~560sqm, Kew – circa $7m
- New home site, ~640sqm, west rear, city views, Kew – circa $3.6m
- Contemporary single level 4-3-3, Balwyn North – circa $3.15m
- Californian Bungalow, 5-3-2, pool, Surrey Hills – circa $2.5m
- Brick Edwardian, 4-2-2, ~630sqm, Malvern – circa $3.75m
- Renovated Victorian 4-3-2, ~450sqm, Prahran – circa $4m
- Victorian Terrace, 3-2-1, ~120sqm, South Melbourne – $1.9m
- 80s family home, 5-3-4, ~750sqm, Caulfield South – circa $2.8m
- School zone, 4-2-2, ~770sqm, McKinnon – circa $2.1m
- Cal Bung w dramatic reno, 5-5-3, pool, Elwood – circa $5.9m
- Brick Edwardian 4-2-5, ~680sqm, Elwood – circa $4.3m
- Modern family home, 4-4-6, pool, ~1000sqm, Brighton – circa $9.8m
- Clinker brick, likely new home site (stca), ~740sqm, Brighton – circa $3.3m
- Californian Bungalow, 3-2-1, near shops/train, Brighton – circa $2.1m
- New home site, ~1,100sqm, north rear, Brighton East – circa $3.15m
- Single level clinker brick, 3-2-2, ~700sqm, Hampton – circa $2.2m
- Single level 4-3-2, ~620sqm, Black Rock – circa $2m
- Contemporary 4 bed home adjoining golf course, Beaumaris – circa $2.75m
Auction Spotlight:
Far enough from the higher density developments taking place around Hampton Street, yet an easy walk to shops, trains and the beach, 5 Garden Street Hampton ticked many boxes for buyers. The single level made it especially attractive for “right sizers”, as did the established, yet low maintenance gardens. The choice of two living zones with 3 to 4 bedrooms also made it appealing to families. The home had been quoted $2.2-2.29m before being lifted to $2.25-2.35m during the campaign. Plenty of people came to watch and participate in the auction. Christian Hegarty headed up the Buxton team and quickly received an opening bid of $2.3m. In no time at all, 4 bidders took the property past reserve, and two further parties entered, as others stepped out. When most thought the auction was coming to a close, bidders 7 and 8 jumped in. The home eventually sold to bidder 7 for $2.672m
Land in Boroondara has been well received by buyers recently, particularly good-sized land with no heritage overlay.
That was what was on offer here at 3 Tyndall Street Surrey Hills, and with next door selling not long ago for $3.45 million (slightly smaller land, slightly better house) buyers no doubt should have had conference in this property and its respective value.
In front of about 60 people, auctioneer Tim Heavyside opened the auctioned with a friendly $2.5m and it did not take long for bidders to see the property announced on the market at $2.7m and eventually sell for $3.286m. Six bidders in all participated here, with most of them over the $3m mark.
Under the shady canopy of the street plane trees and in front of about 30 people, auctioneer Daniel Wheeler conducted the auction for this well renovated, beautifully presented single level, north facing rear period home at 21 Hope Street Glen Iris. With the auction opening at the bottom of the quoted range of $2.7m, a series of measured bids between bidders 1 and 2 saw the price rise to $2.9m and with bidding halting, the half time break was taken. Bidder no. 3 entered at $2.92m and the property was announced on the market. It took a bit of time for the original bidder to come back but they did with a further rise of $5,000 and they won the auction and ultimately the home.