There’s a palpable change in the market place which would probably only be noticeable to those who monitor ‘on the ground’ events closely each week. The much publicised ‘hint’ of a rate drop from Westpac’s Bill Evans, along with a noticeable fall in stock and fewer homes being auctioned, has had the effect of ‘shooting’ a bit of confidence into the buyers arena.
We’ve been aware for some time that there are plenty of buyers in the market place – and it’s obvious crowds attending auctions are not just made of up of ‘sticky beak neighbours’ – but to this point, there’s been no sense of urgency enticing buyers to step into a market place they perceive to be on a downward slope, or subject to painful interest rate rises.
It’s sad but true, that caution prevents most buyers acting against the herd mentality and purchasing whilst there is apparent ‘doom and gloom’ flattening expectation and providing better buying conditions. This is understandable – after all, to the average Australian, the family home is not just a place for shelter, it’s the biggest investment most make in a lifetime, and is, for all intense purposes, their future security.
However, the market is slowly starting to wake up, and this is not unexpected. We’ve had virtually zero growth since December, and although it’s clear we’re suffering tighter economic conditions than previously expected as we lead into the second half of the year – with no one forecasting double digit growth – there is no escaping the pressure our market faces in Melbourne’s inner and middle ring suburbs. Quite simply – supply in these areas is not feeding demand.
The RBA have provided reasonable assurance that interest rates will not be rising any time soon, and as we move towards spring it’s fair to say we’re seeing buyers who have previously been waiting in the wings, coming out in increased numbers as stock drops, and there is increased concentration around the reduced numbers of quality listings available. After all – Aussie’s have not lost a desire to purchase their own home, and investors recognise the rental market is strengthening.
The slight increase in this week’s clearance rate to 59% maybe representative of this – although it is too soon to make a confident call. However, more results are being recorded which show a push upwards from what we would have expected only a few weeks ago.
Any change in temperament is important to note, because as competition increases, it’s likely we’ll see more properties sell over and above what they’re worth – or what they could have been secured at with better negotiation skills.
A confident knowledge of what a property’s market value is, and the ability to negotiate and walk away when the price is climbing too high, are requirements not to be taken lightly.
37 Lomond Drive, Glen Waverley. A family classic, offering 5 bedrooms, a modern interior, and around 700 sqm of land.
Although not in the ‘Glen Waverley’ School Zone, and not exactly ‘walking distance’ to transport, the size of this property and its quiet residential location was obviously enough to pull a hearty crowd of 150 people and 5 willing bidders.
The auctioneer didn’t need to offer a vendor bid – the auction opened at 650 and it was open slather from that point onwards. It wasn’t easy to keep on top of the bidding – the pace was fast, and as the price approached 750K, one of the agents ran inside to get permission to place it ‘on market’ without the auctioneer needing to break pace.
At 760K it was announced on market, and sold a little later for 790K.
18 Fernhurst Drive, Glen Waverley. Anyone thinking the crowd at Lomond Drive had been large, was in for a shock at Fernhurst Drive, There would have been no less than 200 people in attendance, and more arriving as the auction was taking place.
This large brand new townhouse, on roughly 360 sqm of land, was well designed for the luxury home buyer, and its location – nicely positioned inside the Glen Waverley School zone – was an added attraction.
There was plenty of interest; however the auctioneer didn’t open with a vendor bid, and the genuine bid used to kick off the event was a good way below reserve.
Opening at 680K, the auctioneer asked for increments of 40K. At least 4 bidders took the challenge, however at 860K the pace suddenly stalled.
With nowhere left to go the property was passed in and negotiations started, and without the crowd clearing very fast, it seemed there was still some potential interest to tap into.
Catherine Cashmore
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