Slowdown ahead? No signs yet.
Over February’s last 3 weekends, there more than 2,660 auctions were reported to the Real Estate Institute of Victoria (REIV). More than 1,421 sales were recorded. Approximately 687 properties were passed in, 335 of those were on a vendor bid. The clearance rate averaged 71.5%.
Melbourne’s home market has started 2018 with few signs of a slowdown. Commentators warnings at the end of last year about looming buyer caution and faltering home values proved out of place. The February market kick-started with strong clearance rates, plenty of buyers out and supply levels up on the end of last year.
Advertised prices are being achieved and surpassed. In fact, in the current market half (49%) of all Melbourne’s auctions are selling higher than their ‘Statement of Information’ estimate.
When sale prices do blow out in Melbourne, it’s at an average of 10.4% over the real estate agent’s valuation. A speeding market is difficult keep up with and doesn’t listen to regulators. Especially in blue-chip areas like Bayside. In the second half of 2017, Brighton’s sold price versus list price had an average 12% blowout. Hampton blew out by 13.7%.
The trend of strong buying by younger Melbournians is continuing with reports that homes under $750,000 are selling like hotcakes to subsidized first home buyers. This is helping Melbourne’s outer suburbs, where such homes abound, stay in a purple patch of price growth.
New figures (REIV) confirm buying into zones with the best performing government schools, primary as well as secondary, can attract an extra home value premium of around $100K to as much as $410,000. This is enough to match the cost of 12 years of average private school education. Or 6 years each for 2 children at secondary level. Economics has a funny way of levelling out!
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