Monthly Market Update - February 2016
By | 3rd Mar 16

Monthly Market Update - February 2016 

February has historically been Real Estate’s return from the summer break and our first indicator of the Melbourne market conditions with the first big auction weekends being held. Our clearance rate has been consistent sitting around 76-78%.

February saw some record breaking results throughout Melbourne. Some of the highly publicised results for the month included 340 Howe Parade, Port Melbourne, a humble one bedroom home which sold for just under $1 million. 82 Stephen Street, Yarraville set a new record for the inner West suburbs selling for $2.38 million. We have long seen that time in the market will prove fruitful with a 4 bedroom home in Sunshine selling for $935,000 when it was last purchased in 2002 for $384,000 which showed 58% capital growth.

The highly publicised proposed changes to negative gearing seem to have created a number of questions for buyers, with many asking how this will affect the market place. In particular the effect it will have on the resale value of established properties versus new properties. Historically established properties recognise better capital growth than new builds where you can often pay a premium price for the structure itself. Currently around 92% of investors prefer to purchase already established properties, regardless of the proposed changes being implemented.

I would not expect to see a large shift in the market place as if you purchase a new build you will personally be able to negatively gear the property while you own it, but the next owner will not thus putting it on equal playing field with established properties again. For a further explanation on negative gearing, CLICK HERE.  There are of course many factors to consider when purchasing a property and ensuring that you make a wise investment decision. To read my tips on what you should consider before you purchase, please CLICK HERE.

With rezoning taking place throughout many Melbourne suburbs we have seen an increase in owners joining forces to collectively sell their properties. Many of these alliances have proved financially savvy with developers purchasing the sites. 23 owners have joined forces for the sale of the recently re-zoned 1,856 sqm parcel of land in the Melbourne CBD. To read the full article please CLICK HERE. With Melbourne property prices rising 11.1% over the past 12 months and surpassing Sydney’s growth, I would expect to see more of these types of profitable sales in the future.