Melbourne Property News Monthly Wrap – April 2018

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Melbourne Property News - Buyer Marketing

Sellers’ market retreats further – is a buyers’ market coming?

In April’s first 3 weekends more than 1,433 auctions were recorded by the Real Estate Institute of Victoria (REIV). 744 of those homes sold under the hammer. 411 properties were passed in, 186 of those on a vendor bid. The clearance rate so far for April has averaged 68%, matching March’s 68%, but lower than February’s 71.5%.

The subdued auction market emerging in 2018 continues in April. A study of Melbourne clearance rates over 2018’s first quarter shows more cautious buyers, with many suburbs clearance rates dipping under 50% (Domain Group), in areas as diverse as Balwyn, Altona, Springvale, Mont Albert, Berwick and Sunshine West.

The contrast is clear in Camberwell which managed a first quarter clearance rate of 54.7%. This is way down on 79.4% for the same period last year. Prahran rates dropped from 73.7% to 57.4%.

Buyer Marketing observed four auctions in Hawthorn on March’s last Saturday before Easter, resulting in just one sale at auction – 5 Hawthorn Gve. for $4.96M. Further out though it’s often a different story. Up north at Roxburgh Park, first quarter clearance rates are up from 54.2% (2017) to 87.5%.

The Melbourne market appears to have peaked in Autumn 2017. Auctioneers report fewer bidders willing to raise hands in 2018. Going against this grain are the more affordable types of property, attracting keen interest from first-home buyers.

Urban crowding in Melbourne and Sydney, plus immigration growth, is getting a lot of media coverage. New research by CoreLogic confirms that population growth is the main driver lifting home prices.

The 4 states with high immigration levels, Victoria, NSW, Tasmania and ACT are the same states that have logged the highest property value growth over the last few years, whereas states with lower than average immigration have weaker value growth.

Three quarters of overseas migrants arriving in Australia go to Sydney (98,000 a year) and Melbourne (88,000 a year). CoreLogic noted that any decrease in immigration would affect demand and logically, home values would be impacted in these cities.

A NOTE: Last month’s Buyer Marketing Report noted the March 5 auction of 46 Glover Street South Melbourne, passing in at $1,260,000. Unknown at the time to this column, the home sold later that day (Greg Hocking Holdsworth) for $1,450,000, at a healthier $11,154 per square metre.

Peter Fox
Principal Advisor &
Licensed Estate Agent
Buyer Marketing

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