Family home buyers on the hunt as listings soar
Published on 28/09/2015
Family homes were in hot demand, more than apartments, on the busiest auction day since May.
Sales of houses and redevelopment sites continued to outclass Melbourne’s apartment market on Saturday as the sun came out for the busiest auction day since May.
Almost 1100 properties were up for grabs on Saturday. The Domain Group posted a clearance rate of 73 per cent from 888 reported auctions, which senior economist Andrew Wilson said was a “solid result” given the high number of auctions.
Buyers are focusing on houses, which notched up a 78 per cent clearance rate on Saturday compared with the lower 59 per cent clearance rate for units and apartments.
Crowds enjoyed the sun at the auction of 129 Park Drive in Parkville on Saturday.
Crowds enjoyed the sun at the auction of 129 Park Drive in Parkville on Saturday. Photo: Paul Jeffers
Although clearance rates have eased since early September, real estate agents say there are significantly more family-home buyers than sellers.
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Prospective buyers at the auction of 129 Park Drive in Parkville.
Prospective buyers at the auction of 129 Park Drive in Parkville. Photo: Paul Jeffers
Demand for renovated “move-straight-in” houses and for well-located land, is resilient in many areas. But some established units are struggling to sell because of the competition from new units.
Jellis Craig said it was seeing the strongest bidding and sales activity in middle ring suburbs such as Doncaster and Mount Waverley.
However, some market watchers say the urgency to buy is not as strong as it was in May.
Back then, agents said “fear of loss” was causing buyers to up their budgets because they believed house prices were increasing on a weekly basis.
That thinking now appears to be on the backburner as buyers savour the large increase in housing stock.
James Buyer Advocates’ Bidderman statistic, which measures bidders per auction for million-dollar-plus properties, is down from the three bidders per auction seen earlier this year, to two bidders.
“Every agent will say, ‘There is not that much stock’,” the company’s head Mal James said.
“But that is just a standard line. As you come into spring, it is high stock level time and high-quality time. If you can’t find a house in the next few months, you are either unlucky or unrealistic.”
Several prominent agents say Melbourne’s market peaked a few weeks ago. Certainly, there is evidence that some wealthy home owners think selling this spring may be a better bet than waiting until 2016 or 2017.
Jellis Craig director Craig Shearn said wealthy vendors were prudent and well-advised.
“When you see their properties hitting the market after 20, 30 or 40 years, it can’t be all because they are getting old,” he said.
“I am sure some of them are downsizing, but I suspect there is an element of opportunism in there as well.”
Melissa Opie, of Keyhole Property Investments, said the market was patchier compared with in April.
In some areas properties were cheaper than they were four or five months ago. “The $1 million to $1.5 million home market was a really tough market a few months ago, but it has now come back a little,” Ms Opie said
Hodges director Michael Cooney said the playing of the two AFL preliminary finals in Perth this weekend had limited the disruption to Melbourne’s auction scene.
He said open-house attendances were high on Saturday in part because the finals were broadcast at night.
The footy scheduling had also prompted some vendors, planning to auction in October, to start campaigns earlier and run them through the preliminary and grand final weeks.
“The window of opportunity to buy is smaller due to the late finals season and the onset of the racing carnivals,” Mr Cooney said.
“But stock levels are up by 20 per cent to 30 per cent this year. More stock means more buyer activity, and we’re seeing a lot more higher-end family homes coming to the early-October market.”
The robust demand for houses was highlighted by the Reserve Bank, which released the minutes of its September board meeting when the bank kept official interest rates on hold at 2 per cent.
The RBA said the strength in house price inflation was concentrated on detached houses in Sydney and Melbourne.
“Members noted that rapid growth in the construction of new apartments had helped to hold down inflation of their prices,” the board minutes said. “There had been a notable decline in the growth in lending for investment housing in July.”
The market will take a back seat to the grand final next weekend, when fewer than 50 auctions are scheduled.
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