The clearance rate this weekend gives little indication of the overall performance of the market. There were 376 auctions gazetted to take place, however results from only 326 were reported to the REIV – 206 sold equalling a clearance rate of 66%. This may not sound great until you assess that most properties are selling private sale – 632 this week – and with a large number of results missing from the calculations, it’s impossible to draw any firm conclusions. Next weekend 685 properties go under the hammer, before the first super Saturday of the year when close to 1000 properties will be auctioned.
The mixed bag of results reported proves the market is still finding its pace after the Summer break – some of this is down to the quality of stock. Due to the high supply last year, vendor’s that couldn’t sell, & vendors with unrealistic expectations, have relaunched homes onto the market with hope conditions may have changed enough to inspire a fresh glut of interest. In some cases this has worked, however buyers are choosy about the properties they assess and the dollars they choose to spend.
There is however no doubt that buyer enquiry rate has risen with confidence returning after the State and Federal election and the RBA’s spate of 6 interest rate rises, but this doesn’t mean we’ve entered bullish conditions. There is an evident preference amongst buyers to purchase in private sale negotiation rather than stand boldly at auction and risk being pushed to uncomfortable figures. Many of the auctions we attend commonly result in passed in negotiations and on the flip side, vendor’s are still reluctant to ‘meet the market’, preferring to hang out for their ‘wish price’ than sell 10K or 20K less.
As for those results that don’t get reported, one such example was Saturday’s auction at 4/47 Spray St, Elwood. It’s a classic 2 bedroom updated apartment in a location that traditionally attracts a lot of demand. However you’re unlikely to find any mention of the auction in the paper because it never took place. Simply not enough buyers turned up to run the auction. This is not an unknown occurrence and each week will typically happen to a small handful of listings, however to see it happen in an area which usually inspires so much attention was surprising. I did wonder if the floods last week had dented the reputation of Elwood in buyer’s minds, and if so, I doubt it will be a lasting situation. I was told by the selling agent 4/47 Spray st, would now be withdrawn from the market and offered for rent.
5/10-12 Milton St, Carnegie attracted a fair crowd of onlookers and potential bidders, A small 2 bedroom villa unit in a block of 6 with plenty of ‘value add’ potential! The auction was opened quickly and strongly by a confident buyer at 485K. 4 other bidders joined in and in quick succession took the price upwards in 10K increments until it was announced on the market at 535K. The unit finally sold under the hammer to a very happy young couple at $540,500. A solid result for the area.
New stock is not coming onto the market in any great force, and as the overhang clears, we’re likely to see evidence of modest rises. As competition increases around fewer listings it will put buyers under pressure. Over the coming few weeks, negotiation is going to be the real key to securing the best deal.
Don’t hesitate to call or email to make a time for a no obligation meeting to discuss how we can assist you.
Catherine Cashmore & Ian James