WBP Market Wrap: Buyers urged not to engage in panic buying. According to preliminary auction results, there were a reported 1073 residential properties auctioned in Melbourne at the weekend, 67% or 823 of these selling. This result included 825 houses and 345 apartments, with clearance rates of 74% and 59% respectively. The balance of auctions consisted of vacant land sales. The Melbourne market remains well-supplied with yet another weekend giving host to more than 1000 auctions across the city. However, results were varied, ranging from extraordinarily high prices for several quality properties in highly sought-after areas of Melbourne’s inner city market, to shocking failures for equally good properties. The surprising successes were driven by reckless bidding from buyers who’ve perhaps realised there’s just three weekends remaining to buy at auction this year. The fact is, in most cases buyers who purchase this year are unlikely to settle before February to March next year, while those who miss out aren’t likely to settle before April or May. This notion is alarming to buyers who have to consider lease renewal or alternative short-term housing arrangements due to the inactivity in the real estate industry from late December to mid-February. But, it seems buyers aren’t the only ones feeling the pressure as vendors vie for their last opportunity to sell this year. And, let it be said that vendors are facing some tough competition, but not just from other auctions. WBP’s property advisers are reporting an increasing number of private and off-market transaction as November and December leave little time for an auction campaign, which typically runs over four weeks. This provides unique and sometimes uncontested opportunities for buyers who have built rapport with sales agents over recent weeks and months. While the clearance rate has fallen slightly during spring, open for inspections and auctions remain well-attended - a good sign for the continued strength of the market as it draws to a close for the year. However, would-be buyers seeking to purchase this year are warned about the dangers of failing to participate at auction. Many buyers fail to realise that, should a property pass in at auction, the law states the highest bidder has first right of refusal to negotiate exclusively with the vendor to purchase the property. And, with mounting pressure on vendors to sell in coming weeks, this opportunity could be very fruitful for buyers. With this in mind, WBPs property advisers urge buyers to take a measured approach and not engage in panicked buying. It’s also important to note, although clearance rates have fallen, they’ve remained well-supported despite the significant increase in stock levels this spring, confirming the continued strength of buyer demand. However, with lower stock levels as the market reopens in 2015, fewer properties will mean greater competition for buyers. Fact of the week It’s often thought bigger properties and those with a greater number of bedrooms have a relatively greater value than their smaller counterparts. While this is true in many cases, it’s not always the case. While a well-sized one-bedroom unit in popular Melbourne suburb South Yarra might attract a price of $8,000 to $12,000 per square metre, depending on the specific location and quality of the property, a moderately sized two-bedroom unit in the same location, while bigger overall, may attract $6,000 to $10,000. The perception is that the additional bedroom adds greater value to the property, however, the smaller configuration of rooms may ultimately prove to be detrimental to the property. Remember, size and configuration are extremely important when selecting a quality unit or apartment with sound capital growth potential.
Posted on: Wed, 26 Nov 2014 10:08:55 +0000
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