Slowdown forecast but plenty of bidders in July.
There were 2229 auctions reported to the Real Estate Institute of Victoria (REIV) over the 5 weekends of July, with 1712 sales recorded. 517 properties passed in, 223 on a vendor bid. The clearance rate averaged 74%, up on last month’s 71%, but down on last year’s July average of 76.5%.
With some expecting the Reserve Bank to make further interest rate cuts this August, buyers were keen across Melbourne in July. Sunshine had another million dollar sale ($200,000 over its reserve) on July’s last weekend, as the demand for properties in the Yarraville, Newport and Seddon zone spills over to the north. An extended 5 bedroom Edwardian in Malvern sold for $4.98m on July 30 getting $500,000 over its reserve.
Willing bidders have sustained prices growth in 2016 with the median house value now increasing 7.4 % for the year at the end of the June quarter. Apartment prices are also up by 2.7%.
Despite July’s averaged 74% clearance rate many regions had much higher figures on the month’s last weekend, with the South East getting 92%, the North getting 82%, Inner South 80%, Outer East 79%, and the Inner city 78.8%. The Inner East had the lowest figure at 65.4%, which is what dragged the overall average down, showing buyer fatigue in that highly priced sector. East Melbourne bucked this trend however with a perfect 100% clearance rate over the last three months.
Despite the sound price growth BIS Shrapnel has forecast an overall decline in Melbourne house values over the next three years. In its ‘Residential Property Prospects 2016 to 2019’ released on July 11 BIS Shrapnel forecasts house values will rise by 2% over 2016-17. But their crystal ball sees a drop by 3% over 2018-19, leaving an overall fall of 1% over the next three years. They also signalled a looming oversupply of inner Melbourne apartments, which would bring downward price pressure to that segment. Lack of available apartment renters causing lower values.
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