Demand for Family Homes Surges in Melbourne, Australia
Family homes are in hot demand in Australia, being snapped up enthusiastically in some of the busiest property auctions the country has ever witnessed, particularly in the metropolis of Melbourne.
Property in Australia is increasingly sold by auction in preference to the traditional ‘offer and acceptance’ method conducted through estate agents. Property auctions are particularly popular where there is a strong supply of property and in some Australian states, auction is the dominant method of sale.
Sales of houses and redevelopment sites continued to outclass Melbourne’s apartment market last Saturday, which saw the busiest property auction since May this year. Almost 1,100 properties were up for grabs on Saturday and buyers zoomed in on houses, with 78% falling under the hammer with a lower 59% clearance rate for units and apartments. Senior economist Andrew Wilson commented that the volume of sales at the auction was a ‘solid result’ given the high number of auctions taking place in Melbourne.
Although auction property clearance rates have improved since the beginning of September, real estate agents suggest there are significantly more family home buyers than sellers.
Demand for renovated ‘turnkey’ houses and well located land is resilient in many areas of Australia, although some established units are struggling to sell due to heightened competition from new housing units on the market. Property sector insiders suggest that the strongest bidding and sales activity is in the middle ring of Melbourne’s suburbs such as Doncaster and Mount Waverley.
However, some market commentators have noted that buyers are not displaying the sense of urgency that was apparent at auctions earlier in the year. Agents said ‘fear of loss’ was causing buyers to up their budgets because they believed house prices were increasing on a weekly basis at that time.
However, some market watchers say the urgency to buy is not as strong as it was in May because of the large increase in housing stock in the city’s suburbs. According to data from Australian estate agents James Buyer Advocates’, measuring how many bidders there are per auction for million-dollar-plus properties, the figure is down from three bidders per auction seen earlier this year, to two bidders.
" Every agent will say, ‘there is not that much stock’, " the company’s head Mal James said. " But that is just a standard line. As you come into spring, it is high stock level time and high-quality time. If you can’t find a house in the next few months, you are either unlucky or unrealistic ".
Several prominent agents in Melbourne suggest that its property market peaked a few weeks ago, with evidence that some wealthy home owners think that selling this spring may be a better strategy than waiting until 2016 or 2017.
Jellis Craig, director of Melbourne-based agents Craig Shearn said wealthy vendors are prudent and well advised. " When you see their properties hitting the market after 20, 30 or 40 years, it can’t be all because they’re getting old, " he said. "I am sure some of them are downsizing but I suspect there is an element of opportunism in there as well ".
Melissa Opie of Keyhole Property Investments said the Melbourne property market was patchier compared with April. In some areas properties were cheaper than they were four or five months ago. " The AUD1m to AUD1.5m home market was a really tough market a few months ago but it has now come back a little ", she said.
Michael Cooney director of auction organisers Hodges said that last Saturday’s open house attendances were high and increased buyer activity is expected to continue. " Stock levels are up by 20% to 30% this year. More stock means more buyer activity and we’re seeing a lot more higher-end family homes coming to the early October market ".
The Reserve Bank of Australia (RBA) commented that house price inflation was concentrated on detached houses in Sydney and Melbourne. " Members noted that rapid growth in the construction of new apartments had helped to hold down inflation of their prices”, September’s board minutes said. “There had been a notable decline in the growth in lending for investment housing in July ".
Article by +Roxanne James on behalf of Propertyshowrooms.com
