property bargains on the rise

Property bargains on the rise Evonne Barry From: Herald Sun August 21, 2010 12:01AM

Shrewd buyers may also be able to pick up a bargain in Black Rock where auction clearance rates have dropped sharply.
AUCTION failures are proving the key to success for prospective home buyers.
A dramatic turnaround in the performances of various suburbs this year has uncovered fresh territory for bargain hunters.

The latest suburb-by-suburb auction data, compiled by the Real Estate Institute of Victoria, shows clearance rates have dropped by more than 45 per cent - in less than four months - in some areas. Some of the best performers of summer and autumn have struggled in winter, and vice versa.

And, according to REIV spokesman Robert Larocca, this is a time for canny buyers to snare themselves market-beating deals.

He said monitoring trends in clearance rates was a clever tool for would-be investors, because they tended to be reflected in sale prices.

"They can show you where you might be finding a bargain," Mr Larocca said.

"It shows you areas where vendors' expectations are not as high as they were in the first couple of months of the year, and certainly where it's worth looking."

Ashwood, in Melbourne's east, has had the most dramatic form reversal of the year.

Between January and April, this pocket suburb recorded an average clearance rate of 92.3 per cent. Since May, the success rate has fallen to just 46 per cent. Conversely, Taylors Lakes in the northwest has jumped from 53.3 per cent to 73.3 per cent.

Mr Larocca said late April marked the shift: "The first four months of the year were very strong in the Melbourne property market.

"The clearance rate was on average 85 per cent.

"Then pretty much after Anzac Day, the market changed substantially. It sort of turned on a knife-edge and by mid-May we were into the 70s and 60s clearance rates."

Now averaging in the mid-60 per cent range, suburbs with the lowest clearance rates between May and June included: South Morang (36.4 per cent), Gisborne and Docklands (40 per cent), Sunshine North (44.8 per cent), Meadow Heights (47.2 per cent) and Canterbury (48.6 per cent).

At the other end of the scale, the top performers were Airport West and Ferntree Gully (both 100 per cent), View Bank (93.3 per cent) and Wantirna (92.9 per cent).

The standout for the year is Watsonia, which boasts a 100 per cent clearance rate for the 25 properties to have gone under the hammer.

But Mr Larocca said it was a myth that lower clearance rates overall meant a market slowdown across the board. "It's been taken in many quarters to mean that the entire Melbourne market has cooled, and that is in fact not the case," he said.

Agent Nick Kandi, of EJ Love Real Estate, Epping, said buyers could get a lot of bang for their buck in South Morang, where clearance rates are lowest.

He said young families, as well as second home buyers moving farther out in search of more spacious, modern homes, were drawn to the area.

Mr Kandi said prospective buyers could expect a good quality, three-bedroom home for a little over $400,000.

"And you can get a very, very good home if you want to spend between $450,000 and $500,000," he said.

Closer in, City Residential Real Estate managing director Glenn Donnelly said there were clear distinctions between the extremes of the market.

"It's a little bit harder to move the properties that are over the $1 million mark, but the properties in the two-bedroom range, under the $600,000 figure, are certainly moving," he said.

Mr Donnelly said savvy buyers could snare themselves a bargain.