Renewed confidence to spur on Melbourne’s auction action

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Fresh confidence is expected to fuel Melbourne’s property market as it heats up towards the busiest time of the year.

Auction volumes bounced back after a Grand Final lull, with a 75 per cent early clearance rate recorded from 411 results by CoreLogic yesterday.

It follows a successful September, with weekly clearance rates consistently above 74 per cent.

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Auction numbers are tipped to increased across the spring season. Picture: Jay Town

2/51 Marne St, South Yarra was a strong auction seller this weekend.

Massive returns were notched across the city yesterday, with some properties selling hundreds of thousands of dollars above reserve.

A dated 1970s South Yarra apartment notably flew $139,000 above the vendor’s bottom line to fetch $929,000.

A first-home buyer and investor went head-to-head for 2/51 Marne St, with the latter winning the keys, Jellis Craig agent Daniel Joyce said. The buyer planned to renovate the two-bedroom pad in the prized Botanic Gardens Precinct before renting it out.

CoreLogic records show the property’s last sale in 1990 was worth just $173,000.

Mr Joyce said auctions were becoming “far more competitive” as spring stretched on, with first-home buyers active and investors returning to the market.

The South Yarra apartment was popular despite being dated.

The buyer planned to renovate.

CoreLogic’s Hedonic Home Values Index, revealed this week, showed the city’s dwelling values increased 1.7 per cent a $634,913 median in September.

Property expert Terry Ryder said a lack of stock and “healthy levels of demand” at the start of the busiest selling season had caused prices to rise.

“We’re starting to return to a normal market, it’s going to rev along steadily,” Mr Ryder said.

“Vendors are going to come into the market more, because they will see the opportunity (to sell well). With more supply, that will take a little bit of the heat out of clearance rate and prices.”

Melbourne’s market is heating up.

Other factors such as having “the strongest economy in the land” and solid population growth would continue to underpin demand for Melbourne’s market, he added.

CoreLogic auction analyst Kevin Brogan said this week’s interest rate cut to 0.75 per cent would have a “mild stimulatory effect” on the market.

He said that despite many banks not passing along the cut in full, it would still help clearance rates stay above the 70 per cent pass mark across spring.

Real Estate Institute of Victoria data shows auction volumes are expected to peak when 1200 properties are scheduled to go under the hammer on October 26.

The Melbourne Cup long weekend will see numbers dwindle before the market heats up once again.

-with Samantha Landy

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