Clearance rates ease, but first home buyers get ready to roll.
June’s 4 weekends saw in excess of 2,835 auctions reported to the Real Estate Institute of Victoria (REIV). More than 2,128 sales were recorded. Approximately 707 properties passed in with 303 of those on a vendor bid. The averaged clearance rate was 74%, the lowest for this year, but up on June last year at 71%.
Despite dwindling supply clearance rates eased down progressively in June from 77% on the first weekend to 72% on the last weekend. In the current conditions sellers expectations are high, in some cases too high. But buyers know the Spring market brings more choice and some tend to wait winter out. Also, lagging apartment sales are playing a role in dampening clearance rates. Constant media reports about looming apartment oversupply is not helping.
Homes with clever renovations or additions attracted competitive bidding in June, with a stylish Armadale home going for $900,000 over reserve on June’s last weekend to sell for 5.9M. This highlights the boost great presentation and the right preparation can add to a sale price. However if the buyer is a developer, that home might be demolished. An emerging trend in 2017 is the purchase, then demolition of outstanding period homes, usually for multi-unit development. In the past this would often be an off-shore buyer but local developers are now targeting this type of property.
The start of July is expected to bring a burst of demand in the lower value end of Melbourne property as stamp duty exemptions for first home buyers (up to $600,000) kicks in. A rise in values in that sector would logically follow.
Melbourne’s median auction price was $890,250 on Junes’s last Saturday, pushing $900,000. Will Melbourne’s median home price hit a million by the end of 2017?
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