Super Saturday has brought us exactly what we assumed would happen. Over $840M worth of property changed hands last week according to the REIV; nearly $600M at auction over the weekend. With over 1100 auctions gazetted over the weekend, the REIV reported a clearance rate of 68%. This means that although numbers of property jumped up the level of demand jumped to maintain the high 60% clearance rate.
Most of the sales as expected were in the range of $400,000 – $1,000,000. The above $1M range clearance rate was down near 64% and the above $2M lower still. Most buyers are looking for good long term investments and they see this in the lower end of the market. The market is not as full of surprises as it was this time last year or even earlier this year. Most property auctions we attended on the weekend went at prices that were expected.
6/31 Abinger St, Richmond is a good example of a ‘set and forget’ investment. Well located, the apartment is renovated with 2 bedrooms and car parking. The agent opened on a vendor bid of 450K, it was a slow start, and only after a second vendor bid did the auction gain pace. Announced on the market at 530K, it sold under the hammer at 551K. This was a good property that a fair and reasonable price was achieved.
1/17 Gilles St, Hampton is the type of property that appeals to a wide range of buyers – investors, downsizers as well as young home buyers. A very well located 2 bedroom, low maintenance unit brilliantly located an easy walk to the Hampton Street shops and beach. Quoted at $525K-$575K, The auction opened on a genuine bid of 550K and with 5 bidders competing there was no lagging in pace. The auctioneer held back from announcing it on the market until 650K – a fair way from the price quote – however there was no slowdown in the bidding and it could well have been on the market for some time. Two bidders were still active over the reserve and it was finally knocked down to a young couple at 660K. Again the price was not unexpected. We had estimated $640k – $660k.
The market is sitting vey evenly balanced. With more stock coming on over the next 6 weeks before the Christmas hiatus, it will be interesting to see what level of buyer participation will ensue. It is fairly obvious that many people still see property as the best investment. With the Aussie dollar continuing a spectacular climb, with property prices seemingly levelling out and fuel costs also on the decline, nobody is sure of the Reserve Banks next move.
Investors are driving the lower end of the market. Most are feeling fairly confident about future growth in the below $1M sector. If you are considering a property purchase please feel free to drop in and see us. Our first meeting is obligation free.
Ian James