Super Saturday activity confirms strength of market.

Summary

This year - Auctions: 1198 / Clearance rate: 82%
Last year - 
Auctions: 1236 / Clearance rate: 76%
Source: REIV

Melbourne property is going gangbusters, with the weekend the first of many super Saturdays - that is, weekends with over 1000 auctions - expected for our city this year.

Though, what’s perhaps most interesting about the result is the exceedingly strong clearance rate. Rates at 70% or above indicate solid demand, and the presence of strong capital growth. A rate of 82%, however, is exceedingly high and the result of an undersupply of suitable housing for the city.

However, despite the strong result it’s important to note not all markets are performing the same. Overall, the clearance rate for houses was slightly higher than the combined average, at 85%, while units languished, comparatively speaking, at a very reasonable 77% overall.

Like 2016, homebuyers are the driving force behind the demand, with first and second homebuyers the most active at present – the main focus being properties ranging between $550,000 and $1,250,000 in Melbourne’s inner and middle suburbs, particularly those offering a larger land component.

As prices increase, many members of this buyer group are turning to the city’s inner north, where prices are more affordable. Weekend auctions and inspections showed strong attendance for properties in the city’s north, particularly with regards to larger well-established apartments and smaller houses.

Generally, demand for houses in Melbourne’s inner suburbs is strong, particularly in the $850, 000 to $1,500,000 bracket within 10km of the CBD. As a city, Melbourne is not building new houses in the inner and middle rings suburbs. In fact, its reducing the supply as once large family homes become multi-unit develops. It’s no surprise these property types are experiencing significant demand and growth.

Meanwhile, agents claim limited appetite from investors for apartments, with higher pass-in rates being experienced among apartments with compromises, such as those without parking, located on main roads, with privacy issues, small in size and/or with poor aspect.

This, together with a higher tendency among homebuyers to discriminate against B and C-grade apartments with issues, has impeded apartment market performance when compared with freestanding houses. Instead, an increasing number of buyers, including both investors and homebuyers such as upgraders and downsizers, are turning to town houses and villa units as an alternative to increasingly unaffordable houses and oversupplied modern apartments.

Stay tuned in coming weeks as further developments unfold.

This week's auctions

Each week WBP’s property advisers review hundreds of properties and attend auctions throughout Melbourne,
ranking each property on a scale of 1 to 10 based on its investment potential. This week their focus is on...

 170227 42 Eirene Street Yarraville

170227 2.23 Hazel Street Camberwell

170227 8.55C De Carle Street Brunswick

Investment rating:

6.0 / 10

Investment
rating:

8.5 / 10

Investment rating:

4.0 / 10

42 Eirene St., Yarraville

2/23 Hazel St., Camberwell

8/55c De Carle St., Brunswick

Bed 2    Bathroom 1   Parking 3

Bed 2   Bathroom 1    Parking  1

Bed 2 Bathroom 1   Parking 1

Suburb median house price (REIV)

$1,035,000

Suburb 
median unit price (REIV)

$785,000

Suburb
median unit
price (REIV)

$505,000

SOLD: $961,000

SOLD: $820,000

SOLD: $425,000

Location is exceedingly important in Yarraville, particularly when it comes to proximity to the village and associated lifestyle benefits. This double-fronted timber cottage boasts period features and timber floorboards. The rear yard is well-sized allowing future extension of the home. However, access to the Yarraville village and Train Station from the location is impeded by two major roads - Williamstown Road and Francis Street – which is not ideal. This property is perhaps better suited to owner-occupiers who require space for a growing family.

The floor plan for this two-bedroom villa unit is excellent, with the bonus of an internal courtyard adding light to the dwelling. The unit is situated in a small block of just four units, which means there is a good amount of high underlying land value in the purchase price. The interior of the property would benefit from a renovation but is in neat original condition. The unit is in walking proximity to the Camberwell East village and trams on Toorak Road, as well as Hartwell Train Station.

DeCarle Street is centrally located within five-minutes’ walk to Sydney Road shopping strip, trams and Moreland and Anstey train stations in Brunswick. Unfortunately, the street comprised a large number of apartment blocks, making it difficult to find parking, and the streetscape is not as appealing as some of those found in Brunswick. There are blocks in the street with aspect onto Warr Park, offering greater appeal. While north-facing, this apartment looks into other apartments from the living area, with implications for desirability and future resale performance.

Speak with a WBP Property Adviser about how we save you time and improve your chances of buying a property with the right fundamentals for growth. To find out more click here or contact us on 1300 302 581.



Disclaimer: © 2017 WBP Property Group (WBP). The WBP Market Wrap has been produced as a general guide and does not constitute advice. While it was produced in good faith and with due care, no representation is made for the accuracy of the whole or part of the document. WBP accepts no liability for damages suffered by any party resulting from their use of information in this presentation.


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