Signs all point to patchy
The Sunday Age
Sunday February 20, 2011
THERE WERE SOME BIG GAPS BETWEEN BUYER AND VENDOR EXPECTATIONS AROUND THE CITY YESTERDAY. Melbourne's auction market has faced its first big test of the year, and if this truly is a sign of things to come then vendors might want to brace themselves for rough times ahead.The Real Estate Institute of Victoria reports the clearance rate was 65 per cent based on the results of 646 auctions they tracked around the city yesterday.The outcome of another 82 sales or 11 per cent of the total scheduled have not yet been reported. Eleven auctions were cancelled or postponed.In previous weeks, the auction clearance rate has been downgraded by up to eight percentage points as the unreported results were collected.But even without considering the revisions to come, yesterday already marked the end of one of the worst opening months on record for Melbourne's auction market.The clearance rate for the first month of the 2011 market was just 60.8 per cent, second only to a low of 49.4 per cent set in the 2004 downturn.In comparison, 84.6 per cent of properties sold at the same time in 2010 and 73.3 per cent in 2009.And, if that wasn't hard enough, new figures show Melbourne house prices are also on the slide.Analysts Residex report the median house price fell 1.2 per cent to $593,000 in the three months to January.This is the first time since the 2008-09 global financial crisis that house prices have declined or posted near zero growth rates for three consecutive months.Buyers clearly have become very fickle and the market, as a result, is extremely patchy. And there seems to be no formula for figuring out what will sell under the hammer.Take the case of these two properties on the same the street in Fitzroy North that were auctioned only 1 hours apart.At 109 Best Street, an attached, unrenovated but updated single-fronted Victorian terrace sold at auction for $860,000 thanks to competition between four bidders. Chambers Real Estate said the four-bedroom property was declared on the market at $820,000.Across the street, the semi-detached and renovated single-fronted Victorian at 106 Best Street attracted just one genuine bid at $860,000 before passing in. But while the auction was lacklustre, Nelson Alexander said the three-bedroom property sold through later negotiations for $920,000.In Doncaster, six bidders drove the sale price of 24 Acheron Street to $920,000 after it was declared on the market at $860,000. Advantage Property Consulting said more than 150 people gathered for the auction of the renovated four-bedroom house, which had been quoted at $800,000 to $870,000.A three-bedroom townhouse at 5A Smith Street in St Kilda attracted four bidders and sold for $1.32 million off a reserve of $1.2 million. Pride Real Estate quoted it at $1.05 million to $1.15 millionFour bidders were also responsible for pushing the sale price of 271 Highett Street in Richmond nearly 36 per cent above its reserve. The unrenovated, double-fronted Victorian sold for $1.29 million off a reserve of $950,000. Jellis Craig quoted it at $900,000 to $950,000.But there were still some big gaps between buyer and vendor expectations elsewhere in the city. The three-bedroom unit at 6/25 Holloway Street in Ormond received only one genuine bid before passing in on a vendor bid of $500,000. Later offers of $530,00 and $537,500 were received, but the reserve is $560,000, according to Advantage Property Consulting. Hocking Stuart quoted the property at $480,000 to $520,000.In Brighton, the two-bedroom townhouse at 3/61 Black Street passed in on a vendor bid of $755,000. Hocking Stuart reports the reserve is $800,000.At the top end, 12 Creswick Street in Balwyn attracted bids from two parties before passing in at $3,425,000, according to James Buyer Advocates. Hocking Stuart reports the five-bedroom house received a later offer of $3.45 million but the reserve is $3.6 million.There are nearly 1000 auctions scheduled next weekend and almost another 1000 in a fortnight.7 Black Street, BrunswickSold $1.31 millionAGENT NELSON ALEXANDERASKING PRICE $1 MILLION-$1.1 MILLIONTHE auction of this three-storey warehouse conversion went off like a rocket yesterday, with auctioneer Arch Staver's call for an opening offer interrupted by a bid of $1.1 million.A second bid at $1,105,000 came immediately afterwards."It's all happening rather quickly, isn't it?" Mr Staver said to the crowd of 50.The announcement that the three-bedroom, 308-square-metre unit was now on the market touched off a round of furious counterbids from three parties in $10,000, $20,000 and $30,000 rises."I'll just stay out of it," Mr Staver said, as the bidding bounced back and forth without any need for his prompting.A fourth party jumped in at $1.28 million and quickly knocked off the competition, eventually paying $1.31 million at the fall of the hammer.Records show the property sold as an empty shell for $162,500 in December 2003.
© 2011 The Sunday Age
