No cooling down so far for Winter.
Over the 4 weekends of June, there were in excess of 2672 auctions reported to the Real Estate Institute of Victoria (REIV), with more than 2111 sales recorded. Approximately 561 properties were passed in, 252 of those on a vendor bid. The clearance rate for June was 77%, down a little from last weekend’s high of 79%.
Winter hasn’t put a cooler on the Melbourne market yet and activity is going strong. Auction sales to date for 2015 are close to 14,000 which is the highest on record. Outer Melbourne can claim the highest auction growth – up 20% on last year.
Changeover buyers in the Eastern suburbs are driving that powerful market, with a large Tudor style home in Box Hill selling for 2.61 million and setting a new suburb benchmark, with a tennis court and swimming pool adding spring to the price. Kew displayed its blue chip investment credentials with the successful auction of a 5.56 million home which had gained $200,000 a year in value for the owners, since its purchase for $641,820 in 1989.
Bubble talk dominated the media in June, with plenty of graphs showing dramatic up and down value cycles over the decades. However, analysts reminded us that Melbourne has seen periods of much higher growth, for example the current rate is just a third of the rate as in the late 1980’s.
BIS Shrapnel warned that research indicates an emerging oversupply in the Melbourne apartment market, as projects reach completion up to 2018, leading to a drop in values. Other commentators noted this would most likely apply to the CBD and surrounds.
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