After everything was put on hold last weekend for the Grand Final, the auctions this weekend at least gave the impression they were brimming with activity – even if that activity wasn’t particularly coming from the bidders. It’s a market we’ve become accustomed to over the past few months, a market still dwindling under a blanket of cautionary activity with various commentators giving mixed messages as to its future direction. However whichever index you follow – (aside from some areas of Australia such as the Gold Coast, which is underpinned by tourism and traditionally a volatile environment for real estate) – movements in the market have been minimal. We’re not seeing free falling prices nor are we likely to do so, because the main thrust of demand is emanating from an increasing population of home buyers who want to work, live, and invest in a country which – when all said and done – is holding up pretty well.
Results today proved patchy. I attended an auction in Bentleigh during which the auctioneer announced that every property he’d auctioned so far that day had sold! However – it wasn’t under the hammer – all sales had been concluded via passed in negotiation. The message is clear, and no different to the message we’ve been receiving all year. Buyers may not be confident enough to enter into a heated bidding war; however they are confident enough to buy if a happy medium can be reached between buyer and seller. Therefore it’s still a negotiators domain and for the experienced, that equates to some excellent buying opportunities – opportunities which won’t last perpetually.
Most agents again pointed towards a depletion in stock compared to previous spring markets and used this – alongside a nudge at buyers to remember there may be an interest rate drop on the way – to try and inspire a bit of extra activity. If we do see stock diminish over the spring months – and this seems to be the case in the inner suburbs of Melbourne – it’s highly likely there may be a push in prices in certain areas as the year commences. However I doubt it will change the current climate completely. The conditions we’re experiencing now resulted from more than just supply/demand balance alone. At the beginning of the year most saw at least one or two interest rate rises on the horizon. A drop in rates may ease affordability, but doesn’t inspire confidence in the economy, and this is what we need to get people spending again.
Therefore it’s more of the same this week – moderate activity, and most of the good stock selling at its expected market value with a clearance rate firmly stuck at 53% where – incidentally – it has averaged for the whole of September.
1/25 Selwyn St, Elwood – is one of those properties that ticks all the right boxes for investors and owner occupiers alike. Good location, smart interior, small block size, off street parking, and therefore no surprise to see solid interest from 3 bidders and a decent crowd of keen onlookers. Kicking off with a modest opening bid of $480K it took only a few moments to reach it’s on market price of $520K. There was no letup in the pace and expectedly it turned into one of those auctions to defy the current cautionary conditions. The hammer didn’t fall until a good 40K above reserve at $567,000.
25B Barrington St, Bentleigh East, also attracted a good crowd, however this time it was broadly encouraged by Buxton’s celebration of Breast Cancer awareness month – an event that sees the auctioneer dressed in pink, coffee and cupcakes handed to the crowd – and this year, a special appearance from the Pink Panther to entertain the kids. The home was impressive in appearance – a brand new townhouse – a style which is becoming increasingly common in the Bentleigh/Bentleigh East landscape. However despite a crowd of around 100 people, only two bidders showed enough interest to commit to a potential purchase. Opening on a vendor bid of $850K, it was tit for tat all the way until the bids finally stalled – just under the ‘on market’ price – at $940K. The property was passed in and negotiated for $950K.
Quoted at $565K – $620K 2/68 Goldsmith St, Elwood didn’t fare quite so well. Despite having some attractive period features and an appealing interior renovation, there were a few diminishing points which may have contributed to the disappointing result. In particular its position opposite Elwood Secondary College which would promise a steady stream of traffic during school hours, and a lack of any outdoor living area which would probably have limited the level of interest. A modest crowd turned up to watch, however the auctioneer was forced to open on a vendor bid of $560K. He looked hopeful to at least inspire someone to counter his bid, however no one obliged and he was forced to place a second vendor bid of $570K before passing the property in with a reserve price of $600K.