Monthly Property Update- December 2017
By Advantage Property | 5th Dec 17
The Melbourne market has continued its solid performance but there has been a slow down in the clearance rates with the larger Spring auction volumes where we have seen on average around 1200 to 1300 auctions each weekend. That has definitely increased the volume of properties on offer for buyers compared to Winter where the volumes were less than half that or averaging around 500 per weekend. We have been able to take advantage of some great opportunities before auction as well as after auction where there have been some properties passed in and the opportunity to negotiate well below the vendor’s reserve price.
The Melbourne growth in the last year has been unprecedented as we have seen with a number of sales in Melbourne. There was a recent sale in Newport that we missed out on in Schutt Street that sold for $1,526,000 and we purchased a comparable property for a client for $969,000 just over a year ago. We also recently saw a property in Elsey Road, Reservoir that sold only a year ago for $750,000 and then they added value with permits and sold for $1,070,000 with permits for four townhouses showing it is a great way to add instant value. Our market definitely hasn’t peaked as we are still seeing runaway results like the recent result we saw at a development site in Duke Street, St Kilda that we missed out on for a developer client with the site sold for $535,000 over reserve, so the market hasn’t peaked yet when we are still seeing those kinds of results.
The capital growth in the last twelve months has been as demonstrated above, as solid as I have ever seen it. In a lot of instances, many of our middle and outer suburbs have increased by twenty up to forty nine percent per annum and we have never seen that growth in Melbourne before. I think this is largely driven by our population growth being higher than what we have ever seen as well, increasing from one hundred thousand on average to one hundred and forty six thousand, an increase of forty six percent. We have too many upsizing and downsizing families and not enough family homes to meet the population demand and requirements. There has been some phenomenal growth in Melbourne suburbs in the last five years where many suburbs have gone up from one hundred to one hundred and forty percent. We would usually see that growth in a seven to ten year period but it has been pulled forward in the last five years. Read our comments in Hayley Goddard’s article here.
There has definitely been the return of the First Home Buyers since the 1st of July when the stamp duty concessions were increased. They have smashed investors out of the park, so investors have gone running because of the higher interest rates for investors, APRA tightening their lending criteria and also there being increases in land tax, all hitting investors in the hip pocket. We are now seeing the market dominated by home buyers and seeing upsizing and downsizing families dominating the family home market but also seeing developers who are still out in force for land and home sites.
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