Buyers bounce back in August.
Over the first two weekends of August more than 1,096 auctions were recorded by the Real Estate Institute of Victoria (REIV). 488 homes were sold at auction, with 385 homes passed in, 197 of those on a vendor bid. The clearance rate so far in August averaged 62.5%, stepping up a bit from July’s 62%.
There was good news for sellers In August’s first week when the Reserve Bank announced no change to the cash interest rate, keeping it at 1.5%. This is encouraging for borrowing and buyer confidence.
Pressure from the banks’ credit squeeze continues to dampen the market this winter. At auctions many buyers are in no rush and are slow to bid. In some blue chip suburbs where values got overheated in 2017, prices hit a crunch point this winter, falling (in some estimations) from those 2017 highs by up to 10%. Domain Group analysts plotted a 1.8% drop in Melbourne home values for the June Quarter alone, putting the current median at $882,082. Bidders and buyers are backing off if they feel an asking price still reflects 2017 values. While sellers have to grapple with the reality of receding values.
The best selling properties in August so far have been the more affordable under $750,000 type, or properties with development potential in good positions.
But ‘A’ grade properties that tick all the boxes – position, schools, transport, presentation, etc, have not lost value.
Domain Group’s new data released in August’s second week shows Box Hill has been Melbourne’s star performer, as it gains momentum as a cultural hub, with a 144% hike in home values between 2012 and 2017,
Underneath, the demand for residential property is still solid. Melbourne has plenty of buyers with strong equity and ability to service a loan. The property coil is rewinding, as people save up and prepare for their next property move!
Principal Advisor &
Licensed Estate Agent
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