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Melbourne is seeing positive growth in the real estate sector, especially when it comes to home clearance rates, according to a local market adviser.
Buyer Marketing principal adviser and licensed estate agent Peter Fox said July is seeing better home clearance rates than in recent months.
“Over July’s first two weekends, more than 592 auctions were recorded by the Real Estate Institute of Victoria (REIV). Of these, 339 homes were sold at auction, with 142 passed in, while 61 of those were on a vendor bid,” he said.
“In the first half of July, the clearance rate averaged at 73 per cent, shooting up on June’s 67.5 per cent and May’s 62.5 per cent.”
According to Mr Fox, even though auction numbers are low for the month of July, it is typical for mid-winter and the school holidays season.
“Totals are actually sitting about 40 per cent lower than the same period last year. However, this dwindling supply, plus good buying conditions, means clearance rates are very high,” he said.
Mr Fox mentioned that the Melbourne market is still stabilising, with a lot of caution in the market, but people are willing to charge in for the right kind of property.
“Agents are reporting some auctions are getting way over reserve again,” he said.
“Bentleigh East was Melbourne’s busiest auction suburb on July’s first weekend and actually notched up a 100 per cent clearance rate. [In the first week of July], seven bidders competed for a modest cream brick home on a large block at Marlborough Street, selling for $1.07 million.”
Mr Fox also said that investors are getting more active again at inspections and auctions.
“This is not surprising, because investors know a low market is an optimum time to buy,” he said.
“Back-to-back interest rate cuts, plus income tax relief, plus easier lending requirements are giving home hunters a real boost in confidence. But despite some keen home buyers out there, consumer spending is down, as people save and try to pay off big mortgages.
“Saving is great for reducing personal debt but not so good for the economy and has the financial authorities worried. The Reserve Bank is running out of interest rates to cut. What a great time to borrow.”
realestate.com.au chief economist Nerida Conisbee most recently said the ScoMo bounce and two interest rate cuts are all breathing new life into Australian property.
“Search activity has seen a bump, particularly in Melbourne and Sydney, our hardest-hit markets, and clearance rates in premium suburbs are getting back to high levels,” she said previously.
“We are yet to see any real uplift in the number of people listing properties for sale, and pricing data is yet to reflect a change in conditions, but it is likely that the bottom is very close.”
realestate.com.au also recently released its July Property Outlook report, which found that Allambie Heights, located on Sydney’s Northern Beaches, was the most in-demand suburb in Australia, with a median price of $1.5 million for all dwelling types in the area.
Following closely behind was Melbourne’s Middle Park, holding a median price of $1.98 million.
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