Finally, things are looking up Chris Vedelago September 18, 2011 Comments 31 Flash version 9,0 or greater is required You have no flash plugin installed Download latest version from here Spring looking good for property After a winter which saw property on its knees, there are signs the market is looking up. Simon Johanson reports. Video feedbackVideo settings Supply levels have finally risen in the spring selling season.
Melbourne is finally starting to see a boost in auction numbers for the spring selling season, which appears to have started late this year due to growing concerns about the health of the economy and property market.
There were 626 auctions scheduled around the city yesterday, which is the highest supply level seen for a Saturday in months but still comparatively low for this time of year.
The number of properties that have gone up for auction in September is down 16 per cent compared with the past two years, but about on par with the stock level seen during the 2008 global financial crisis.
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The property at 2-4 Stanley Street, Ivanhoe, attracted more than 45 bids. Picture: Michael Clayton-Jones. But while the auction market is in a slow burn, conditions appear more problematic in the private sale market, which is where the vast majority of real estate is sold.
The number of properties that have been on the market for more than 60 days has jumped 18 per cent, according to tax reform group Prosper Australia.
Prosper's ''stale stock'' estimate, which is based on data sourced from SQM Research, points to a massive - and still growing - oversupply of homes for sale, particularly in the city's outer suburbs.
In fact, houses offered by private sale are now spending an average of 92 days on the market, compared with 53 days at the same time last year, according to Australian Property Monitors, which is owned by Fairfax. Units are averaging 86 days, up from 57 days.
Yesterday, the auction clearance rate was 57 per cent for the 540 results reported to the Real Estate Institute of Victoria. The outcomes of another 86 sales are still unknown.
With such a significant proportion of properties still passing in at auction, the consensus seems to be that it is vendors with quality properties or those willing to meet market expectations - either when setting a reserve or during after-auction negotiations - who stand a good chance of a successful outcome at the coalface.
Take the example of 47 Armstrong Street in Middle Park, a three-bedroom Edwardian that was quoted during the sales campaign at $1.4 to $1.5 million. But when it was clear that interest was at a lower level, the owners chose to set a more modest reserve.
''The feedback was below what we were chasing. The vendors were very motivated to sell, and that's why they set a lower reserve on the day because that's where the market was indicating its true value,'' said Karl Gillon, managing director of Buxton Albert Park.
The property, which attracted a crowd of more than 150 people and four active bidders, was declared on the market at $1.3 million and sold for $1,345,000.
In Cremorne, more than 100 people gathered for the auction of 56 Chestnut Street, with six bidders emerging from the pack to bid on the three-bedroom townhouse. An opening genuine offer of $810,000 kicked off the frenzied competition that did not end for another hundred bids.
Declared on the market at $910,000, the hammer did not fall until $1,021,000. Biggin & Scott Richmond had quoted it at $800,000-plus.
Two bidders could not get 40 Balwyn Road in Canterbury over the line, with the six-bedroom house passing in at $2.9 million. Jellis Craig declined to comment, but sources say the property later sold for just over $3 million.
In Kensington, the four-bedroom townhouse at 2/80 Hobsons Road attracted no genuine interest from the handful of people who attended the auction. Keyhole Property Investments said it opened and passed in on a vendor bid of $850,000. Marston & Cook had quoted it at $860,000-$890,000. The reserve is $880,000.
A vendor bid was also the only bid received for 111 Walsh Street, South Yarra, a three-bedroom, double-storey 1860s house that opened and passed in for $3.25 million, according to James Buyer Advocates. Marshall White reports the reserve is $4 million.
