Weekly Market Update May 6, 2019
By Advantage Property | 6th May 19
Why bidding is still strong for inner city dwellings.
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Melbourne continued its consistent run with a 58% clearance rate from 373 auctions. There was some solid results, particularly at the entry level unit end of the market. We saw some strong bidding with 5 bidders fighting for an old style apartment in East Melbourne which sold for $820,000, well over the $760,000 reserve. We also saw a warehouse conversion in Batman Street, West Melbourne sell for $924,000 against an $843,000 reserve with 3 owner occupiers bidding and the strongest result was a 3 bedroom house in Meaden Street, Ashburton which sold for $1,210,000. Four bidders pushed it over the $980,000 reserve with an investor beating a young family to the keys.
Investors have been smashed out of the market in recent times in Melbourne. Though, the number of property investors has increased by 20% in the last 5 years with over 375,000 people owning one investment property and 97,000 owning two properties. This may change if Labour limits tax breaks in the future.
The apartment building market has slowed down and has fallen every month for the past year. It is unlikely that building activity will pick up soon and that the building industry has continued to fall since 2017. This could cause the apartment market to slump even further.
On average, most Melbournians now aren’t moving and are only selling every 12.2 years and that’s a lot of time between home owners buying and selling. In previous years, it was more like 7 to 10 years because of the rising cost of buying and selling with stamp duty and agents fee. This has had more home owners renovate and stay where they are rather than have to pay the high changeover costs when they are buying and selling.