Auctions aplenty in October, with outer suburbs leading value growth.
On October’s 4 weekends in excess of 4,615 auctions were reported to the Real Estate Institute of Victoria (REIV). More than 3,120 sales were recorded. Approximately 1,064 properties were passed with 519 of those on a vendor bid. The clearance rate averaged 75%, down on October last year which was a very high 80%.
In October sale-boards were springing up on every second corner in the busiest auction suburbs. But after notching up house price growth of 14%, rising to $817,000 over the last 12 months (REIV), the buoyant Melbourne market is at last showing signs of easing. Although great value growth is hitting many outer suburbs now, the overall averaged Metropolitan price growth for the September Quarter was just 0.7%.
The strength of the market has been enough to carry a ripple effect of rising prices from blue chip inner suburbs all the way out – to the relief of outer ring homeowners there who feeling a bit left out. But not any more. Outer Melbourne has dominated the top twenty price growth suburbs in the September Quarter, while inner Melbourne has plateaued, or at least slowed dramatically, which signals the current growth cycle may be reaching its end. Forecasts change according to different sources but some property analysts describe a 3 year cycle as being typical of Melbourne, where strong price growth starts in the inner city before creeping to the outer ring.
Strategists have predicted there will be an increase in for sale listings if a metropolitan value plateau becomes more apparent. Homeowners who have been riding the market up over the last few years will move to cash in on the capital growth, before an ‘adjustment’ or receding values take affect.
Forecasting the future from one Quarter’s results is reading the wind though and in Melbourne we know the wind can swing around. There’s still another big auction market Quarter to go for 2017. This will give us more clarity!
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