Prestige homes in Melbourne’s most sought-after locations attracted spirited competition at auctions on the weekend but the city-wide auction clearance rate pulled back.
Among the sale highlights on Saturday was a Brighton property that soared $600,000 over reserve to $3.1 million, an Armadale house which sold for just shy of $6 million and an imposing Victorian residence in Elsternwick. It was scooped up by a young family at an auction attended by more than 200 onlookers.
But the solid bidder depth seen for $3 million-plus homes wasn’t always matched by highly inflated prices. Added to this, the Domain Group reported the lowest clearance for metropolitan Melbourne in a month: 73.7 per cent from 560 reported auctions.
Market watchers say Victoria’s new quoting laws for residential property sales are impacting on prices, and there are fewer tearaway results.
Buyer’s advocate Adam Woledge, of Woledge Hatt, said good properties had been selling for 20 per cent over the reserve in February and March before Consumer Affairs Victoria’s underquoting laws came in.
“They are more likely now to go for 10 per cent over the reserve, so the market is a lot tighter,” he said.
Marshall White director John Bongiorno commented that Melbourne’s market was in a healthy growth and expansion phase. But he said buyers were “showing less interest in negotiating with vendors with elevated expectations, something to keep in mind for those interested in selling.”
On Saturday, one of the biggest auction crowds of the day turned out to see Biggin & Scott notch up a sale for the long-time owner of a stately five-bedroom Victorian at 25 Gladstone Parade, Elsternwick.
Selling agent Daniel Ashton said four bidders, all local families, competed, with the property selling to a young family from nearby Windsor for $3.22 million.
The auction, as with many at the weekend, saw property punters try to slow the pace of bidding by deploying low-increment bids. The Gladstone Parade sale kicked off on an offer of $2.8 million, but the would-be buyers fired dozens of $1000 bids once the 780-square-metre corner allotment was declared “selling” at $3.15 million
“It was quite a spirited auction but a drawn-out affair,” Mr Ashton said. “There must have been at least half an hour, if not 45 minutes, of bidding.”
He said the house required an update. “It had a kidney-shaped pool out the back, so I think in time, whether it is straight away or a couple of years down the track, the family that has bought it will appoint an architect and a builder and upgrade the property.”
In Armadale, two bidders slugged it out to secure a contemporary European-style home at 9 Avalon Road, one of the suburb’s most coveted addresses.
The four-bedroom home was declared on the market at $5.42 million by Marshall White auctioneer Justin Long.
It sold for $5.84 million, which Mr Woledge described as a good result that reflected underlying strength in the top end of the market.
He said another large family home at 2 Netherlee Street, Glen Iris, also fared well. It drew five bidders, with the auction opening on a $3.2 million bid. On the market at $3.7 million, the contemporary, new home was knocked down by Marshall White for $3,825,000.
Mr Woledge said an earlier off-market sales campaign for this property had failed to generate acceptable offers. The successful sale on Saturday showed the auction sales system was working well for many prestige homes.
Further south, four bidders chased after the Nick Johnstone Real Estate listing at 20 Sussex Street, Brighton.
The three-bedroom home was snapped up for $3.1 million.
Auctioneer Nick Johnstone said the final sale price was $600,000 over reserve: “It was a great result; Sussex Street is one of the most sought-after streets in Brighton.”
There were upbeat results in more affordable areas, too. Advantage Property Consulting reported that it had missed out on purchasing for a client a weatherboard house at 21 Lloyd Avenue, Reservoir.
Auctioned by Barry Plant, the three-bedroom home on 560 square metres made $720,000 on Saturday, 78 per cent or $315,000 more than when it last traded for $405,000 in 2011.
Once again, villa-units were in demand. Buyer’s advocate and certified valuer John Sommers, from McRae Property, was surprised by the strong price achieved by a villa at 2/62 Brady Road, Bentleigh East, offered by Hocking Stuart.
Quoted late in the sales campaign at around $870,000 to $900,000, the three-bedroom dwelling was on the market at $910,000 with three bidders. It fetched $955,000.
“You cannot justify that result on an analytical basis,” Mr Sommers said.
Melbourne has now had four and a half years of constant house price growth. Many observers expect some pull-back in the rate of growth when stock levels go through their traditional surge in spring.
But whether there’s going to be a major change to the growth cycle in Melbourne, where real estate sales are so heavily sustained by population growth, is unclear.
“Logically, nothing lasts forever,” Mr Sommers noted. “But there hasn’t been a big rise in unemployment and money isn’t getting any more expensive although it is getting more difficult to obtain.”
At the weekend, the inner east was the only Melbourne region to chalk up a clearance rate below 70 per cent.
But the northern suburbs pumped. This region scored a high 91.7 per cent clearance rate on Saturday.
The next highest area was the west at 80 per cent. It was followed by the inner city at 77.6 per cent, the south east at 77.1 per cent, the outer east at 75.0 per cent and the north east at 73.4 per cent. The inner south was at 70.3 per cent and the inner east had a clearance rate of 62 per cent.
There were 190 unreported auction results, a high number. Many of these are likely to be properties that were passed in on a vendor bid.
This article was originally published by CHRIS TOLHURST |