Channel Nine news ran with a lead story on Saturday night, saying the market in Melbourne has definitely faltered and talked about the bubble bursting. The “expert” they interviewed was a reporter from the Herald Sun. The talk of only 60% clearance rate shows the market in Melbourne is lost!!
There were more auctions held than any weekend since March 2008 and the clearance rate remained at the same level as it has been since October this year. I think it was a slow news day on Saturday. The market is tilted in the buyers favour for the moment. The market is hardly in free-fall. We will not see 40% drops in property values. We will not see people “giving” away their properties. In fact, I think we will see modest growth throughout 2011 in the top third of suburbs in Melbourne.
The consistent clearance rate of 61%, and a recorded 1210 total sales for the week, is indicating we have a market which is neither hot nor cold, but rather best described as a ‘negotiators market’. This was fairly obvious when looking at the number of unreported results – 195. We purchased seven properties in the last 4 days with another 5 still under negotiation.
17 Northcliffe Rd, Edithvale– 3 bedrooms 2 bathroom house, renovated and on 822 sqm of land. Quoted $610,000 – $670,000, the auction opened on a vendor bid of 610K, however despite a good crowd there was zero activity from buyers. The agent worked very hard to get things started – going into see the vendors more than once and sending his agents into the crowd to chat with buyers whilst he did so. Finally someone offered 620K and this set the ball rolling. 2 bidders fought it out to 690K where it passed in, (despite the agent stating one more bid would probably put it on the market). The property sold via negotiation for 695K.
Taurus Rd, Doncaster East – a 4 bedroom, 2 bathroom house verbally quoting high 600K – low 700K. The auction opened on a genuine bid of 650K, In contrast to the other auctions, the pace was fast with 3 bidders and a lively atmosphere. The bidding slowed at 727K at which point the agent put it on the market and, with no other bids knocked it down at 727K.
8 Black St, Brighton – 4 bedrooms 3 bathroom, 2,000 sqm of land, and a vendor that had lived there for 38 years. A premium spot in Brighton, the agent was quoting 5Mil – 5.5Mil. There was a large crowd and seemed to be good interest, however another slow opening. I’ve never heard an agent go on so much about a properties potential before asking for bids. He seemed to be thoroughly enjoying the attention or just avoiding the inevitable pass in which was becoming an all too familiar pattern. Once he did stop talking, one buyer was willing to open on a bid of 4Mil. This opened the way for someone else to get involved, and for a moment there I did think it might just reach the quote range. However alas – no such luck. The house was passed in at 4.8Mil and was later sold via negotiation for $5,125,000.
And so the pattern continued throughout the day. Few properties sell under the hammer these days but good negotiators will make the difference in walking away from a good property and securing it for a good price.
If you are considering a purchase of property in Melbourne, please do not hesitate to give our office a call. We will be taking a short break after next weekend but our emails and office phones will be managed throughout the festive season.
This will be the last market comment for the year. We will start again early in the New Year. Our last newsletter will go out later this week. From the team at JPP, I want to wish you a safe and happy festive season.
Ian James
