Records tumble in March, with spillover suburbs attracting buyers.
In March, there were in excess of 2902 auctions reported to the Real Estate Institute of Victoria (REIV) with more than 2156 sales recorded. Approximately 745 properties were passed in with 341 of those on a vendor bid. The clearance rate averaged 72%.
A shortage of stock has characterised the market so far in 2016. It’s a stop-start period with public holidays interrupting the usual build up to a property sale so some vendors avoid it. The scarcity of homes for sale has contributed to high prices, defying predictions of a cooling Melbourne market for 2016.
A modern luxury home in Toorak fetched $8700 a square metre at auction, breaking the square metre record for that suburb for a second time this year. Yarraville’s record was smashed with a $2.3 million sale. Other records were broken in Mitcham and Sunshine.
A clear trend continuing into 2016 is the growing amount of buyer interest in spill-over suburbs by people priced out of more expensive areas. Pricey Kew for example may be a first choice due to its many good schools, but more affordable North Balwyn benefits from the spill-over factor. Williamstown spills into Newport. Eaglemont spills into Heidelberg etc. Each highly desirable area has a neighbouring suburb getting very good price growth.
Following continued warnings in the press about Australia’s perceived housing bubble Reserve Bank of Australia governor Glenn Stevens spoke out on March 22 at the Annual ASIC Forum, in a session named ‘Can we withstand a major global shock?’. Stevens reassured Australians that the nation was “adjusting quite well” to lower commodity prices and had more policy scope and fiscal ability to respond to a worldwide downturn than most other countries.
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