Weekly Market Update
By | 15th Oct 18

October 16th, 2018

The Melbourne market is definitely providing some great opportunities for buyers in the last few weeks and we have see the lowest clearance rate since the last down turn in 2012 on the weekend with a 53% clearance rate from 653 auctions.  Though there were some solid results for properties with a “WOW” factor, or properties in great locations, which are still in demand. A run-down house is Westgarth Street Northcote sold for $1,735,000, $185,000 over reserve. There were only two bidders, but it only takes two to tango and they pushed each other and it was bought by someone who is going to bulldoze the house and build a new dwelling.  There was also some alot of attraction for an interesting proposition in Caulfield South in Latrobe Court where two houses on one title sold for $1,480,000. They sold around $100,000 over reserve and there were six interested parties. We had an investor client that was interested, however it sold well above their budget.

Most experts agree that Melbourne's property market will be relatively flat and prices could reduce 5 to 10 percent, but we are not going to see dramatic price drops of 40 percent as some doomsayers and speculators have commented.  There will be a flat market in the next year or so and the savvy buyers will be looking for properties where they can add value and create some instant equity through renovations and subdivisions. They will also try to buy wholesale opportunities not in the retail market, like our Group Block strategy. This will be more important for our investors where they can leverage to buy in bulk in syndicates and make money when they buy, not when they sell!

With all this negative talk about the market expecting properties to be crashing in price everywhere, this example proves them wrong. We just saw the biggest price ever paid in Australia for a house in Point Piper which sold for close to $100 million dollars. It smashed the previous record next door of $71 million by close to $30 million dollars. This showed that buyers still have confidence in paying record prices, even in the current market place!

Watch: Frank Valentic's second update for October