Melbourne’s prestige market bullish on first spring auction weekend

Melbourne’s peak spring season for selling residential properties had a power-start on the weekend as prestige homes sold strongly and buyers took advantage of increased stock levels.

Despite cautious bidding at many auctions and a low clearance rate in Melbourne’s inner-east, the market delivered for sellers, with the Domain Group posting a city-wide clearance rate of 74.8 per cent from 644 reported sale results. The results of another 180 scheduled auctions on Saturday were not reported by real estate agents.

In a pointer to the consistency in the market, the weekend clearance rate level-pegged with the clearance rate reported on the previous weekend and was only marginally lower than the 77.5 per cent reported for the first weekend of spring last year.

House sales led the market with a 76 per cent clearance rate from 531 auctions. By contrast, only 71 per cent of the 113 apartments up for grabs sold.

Domain Group chief economist Andrew Wilson said Melbourne’s auction numbers were sharply lower at the weekend, with 841 listings compared with the previous weekend’s 934. He said auction listings would bounce back next weekend when nearly 900 homes are set to go under the hammer.

Agents describe the market as steady rather than spectacular, with the strong spots including the outer-eastern suburbs, near-city prestige houses and land-only properties with redevelopment potential.  

At the weekend, three bidders targeted a three-bedroom/two-bathroom single-fronted house at 36 Airlie Avenue, Prahran.

It last changed hands in 1998 for $406,000. This time, the smartly renovated property was quoted by Hocking Stuart at $1,910,000 to $2.1 million.

• Related: Click here for Saturday’s auction results
• Related: Click here for the Market Snapshot
• Related: Albion home snapped up by young couple for $905,000

Advantage Property Consulting’s Frank Valentic reported that the home was on the market at $2,175,000 and sold to a downsizer for $2.35 million.      

Another property that wasn’t declared on the market until the bidding level was above the quoted price range was a roomy Californian bungalow at 8 Bradford Avenue, Kew.

In a slow-paced auction that lasted 38 minutes, four bidders vied for the 833-square-metre offering, marketed by RT Edgar as a redevelopment site.

Each of the bidders tried to take some heat out of the auction by lowering the increments of their bids. Quoted at $2.7 million to $2.9 million, the listing was on the market at $2,940,000. It eventually sold to a family group for $3,060,000.

Well-appointed homes and blocks of land at this price point and above appear to be punching high.

The most expensive property reported sold at auction on the weekend was a four-bedroom Federation-era home at 121 Kooyong Road, Armadale, which sold for $5.1 million. Selling agent Marshall White said four bidders competed and the final price was significantly above reserve.

Other properties, sold through expression of interest campaigns, have fetched higher sums in the past week.

For example, RT Edgar last week sold a contemporary European-style home at 83 Kooyongkoot Road, Hawthorn, for a price it said was “well over $7 million”.

Selling agent Oliver Booth said five prospective buyers of the six-bedroom property pitched in with offers above $6.5 million.

He said he was seeing consistently solid demand for top-end offerings, adding that open for inspections for coming auction properties were attracting a lot of people.

Another Kew property billed as a knock-down-and-rebuild buy, at 19 Rossfield Avenue, also fared well on Saturday.

Buyers’ advocate Adam Woledge, from Woledge Hatt, said Kay & Burton had to start this property’s auction with a $1.75 million vendor bid. Quoted at $1.8 million to $1.98 million, the listing was on the market with five bidders at $2.15 million and sold for $2.325 million.

“It certainly seems that people are quite confident about building new homes,” Mr Woledge said. “A good block of land that has good width is the key to land-only properties selling strongly. If they have good width it helps a lot with construction costs.”

He added that many inner Melbourne auction properties were not being announced as being on the market until they hit a price point above the top figure in their quote ranges. “The quoting is more accurate now with the new [Victorian] underquoting laws, but it is confusing for a lot of the buyers that properties aren’t being announced on the market within their price ranges.”

According to data from the Domain Group, the outer east was the top region for auction sales at the weekend with a vendor-friendly 88.9 per cent clearance rate.

This region was followed by the south-east with 81.6 per cent, the north-east with 81.3 per cent, the north with 76.6 per cent, the west with 76 per cent, the inner city with 73.1 per cent and the inner south with 72.0 per cent.

The inner east only managed a clearance rate of 66.3 per cent.