Monthly Update - November 2018
By Advantage Property | 2nd Nov 18
Your monthly update by Frank Valentic
The Melbourne market has continued to provide more opportunities for buyers and we have seen clearance rates drop to the low 50% mark in the last month. This is the lowest clearance rate that we have seen since around 2012. Though, it's not all bad news as Melbourne’s market needed to level off after five to six years of very strong growth in many suburbs. Melbourne’s median house price rose 52% over the last five years and even though many areas have come back, Melbourne still has had an average increase of 2.4% in the last twelve months.
The Block auctions were a test for the market as many people had expected them to be in line with the Melbourne average and see half of them pass in on the day. Though, they passed the test with flying colours as all 5 apartments sold for a combined total of $1,980,000 above reserve. This was stronger than last year’s series in Elsternwick that sold for a total of $1,220,000 above reserve. We bid on all five apartments for our clients, being a combination of investors and a downsizer. We were disappointed to miss out on all of them but it’s important to stick to your budgets and walk away and not get carried away with the hype of The Block auctions. We have now bid on 35 of the 45 Block properties and bought seven for our clients.
The market is definitely experiencing some correction in the one million plus price range and there were 3,760 properties sold over two million in the last year compared to 2,430 properties a year before. The top end of the market is definitely feeling the pinch and many vendors are taking their properties off the market because their expectations are not being met and these properties are taking longer to sell in the current market.
The lower end of the market is the strongest segment in the market at the moment as First Home Buyers are out in force. The price bracket up to $750,000 and particularly under $600,000 where buyers don’t pay any stamp duty, is the strongest as they are seeing savings of around $30,000 on stamp duty. This market is as solid as it was back in 2008 when First Home Buyers were given a First Home Buyers grant and bonuses.