How did everybody end up standing around a loud person with a gavel on a Saturday morning? Domain explains.
- Tap here for Saturday’s auction results
- Tap here for the market snapshot
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Two half-built townhouses in Sandringham sold strongly at the weekend, as buyers were warned not to underestimate the depth of demand for Melbourne property.
The mortgagee sale of the townhouses at 131 Bay Road attracted interest from builders and owner-occupier buyers who were in partnership with a builder.
After sitting half-completed for two years, the property drew bids from four parties on Saturday before being sold for $2.3 million by Hodges Sandringham auctioneer Angus Graham.
An art-deco flat at 8/9 Coppin Grove, Hawthorn sold for $1,022,000 on Saturday.
“We probably had 80 inquiries over the 20-day sales campaign,” Mr Graham said. “The reality is it will cost between $400,000 and $600,000 to finish the job, including landscaping.”
The property was marketed as offering a potential $3.5 million return when finished.
With more than 1000 properties up for grabs in the city at the weekend there was more choice for buyers. Not surprisingly, an increased number of auctions attracted only one bidder.
Two half-completed townhouses at 131 Bay Road sold for $2.3 million on Saturday.
Melbourne recorded another year-low clearance rate of 75.9 per cent at the weekend, according to auction results collected by the Domain Group. This was lower than the 76.6 per cent recorded on the previous weekend.
It’s becoming clear that parts of the market are softening, although this may be due to the normal winter pause in transaction activity in Melbourne’s market. Certainly, many agents claim that prices remain high, even if bidder numbers are down.
Some 774 auction results were reported on Saturday, with 160 properties being passed in. The results of a further 248 were not reported by agents.
Nelson Alexander sales director Arch Staver saw a mixed bag of results.
“I had two very strong auctions that surpassed reserve prices – one in Napier Street, Fitzroy and one in Yambla Street, Clifton Hill,” he said of his Saturday auctions. “But conversely two other properties – in Fitzroy North and in Fitzroy – failed to sell; in fact, they failed to get a bid.
“I think buyers are sitting on their hands. They’re not willing to go too hard until the property is on the market.
“The problem is that vendors are reluctant to put it on the market prematurely if they don’t have the confidence in the depth of the buyer pool. It’s a bit of a stand-off and I saw that once or twice today.”
Mr Graham said a month had passed since he’d seen frantic bidding at an auction with a property going well over reserve. There were also more auctions where one person bid.
“I don’t think the market has weakened necessarily,” Mr Graham said. “Prices certainly haven’t gone backwards, but it is just a little bit harder.”
The market is experiencing sharper segmentation. Older-style flats are performing considerably better than new-build units, land-only sales are faring extremely well and coveted locations, such as the inner-eastern council zones of Stonnington and Boroondara, are doing better than less desirable areas.
The bidding came easily at Kay & Burton’s auction of a handsome four-bedroom Victorian home at 49 Grove Road, Hawthorn.
Before a crowd of 70 people, the house was declared “selling” by auctioneer Sam Wilkinson after a first bid of $3.2 million. Soon another bidder was in the frame, before the property sold to the first player for $3.35 million.
Two kilometres away, at Jellis Craig’s auction of an art-deco flat at 8/9 Coppin Grove, Hawthorn, five bidders pushed the selling price to $1,022,000. Paul Nugent, of Wakelin Property Advisory, said the two-bedroom unit was on the market at $960,000.
He said the unit hadn’t been updated since last selling for about $800,000 four years ago.
“A lot of people are underestimating this market,” Mr Nugent said. “They want to believe that it is faltering and it just isn’t at the moment. While we have low interest rates and the alternative investment returns from cash or shares aren’t great, property will continue to perform.”
The trend to older-style units from the 1930s to the ’70s selling strongly is a city-wide one. Daniel Wright, from Hocking Stuart’s office in Chelsea, 30 kilometres south-east of the CBD, said two older units in the suburb attracted hefty competition on Saturday and achieved results significantly above their reserves.
But he said another smaller, three-year-old Chelsea unit failed to attract competitive bidding and is still on the market.
Abercromby’s Real Estate director Jock Langley is tracking very strong demand for quality properties in Stonnington and Boroondara.
“Good real estate will always get good results, but recently there have been a number of houses at the premium end of the market that have done pretty well,” he said.
“There are pockets of the market that are flat and there are pockets that are working well for us. Stonnington and Boroondara are the areas people want to be in and people will pay accordingly.”
