How are auctions driving the Melbourne property market?
In a busy market such as Melbourne's, looking for ways to get ahead of the competition and snap up the property you want is of the utmost importance.
Whether you're turning the first page over in your property portfolio, trying to expand an existing one or buying an owner-occupied home, finding a way to make yourself successful in the market could save you money and time.
How exactly do you go about that in Melbourne? Look to the auctions. What's more, a property agent from Cohen Handler could be your key to success in the auction room.
Melbourne suburbs showing perfection
As of March 1 this year, every property in Box Hill, Croydon, Donvale, Doncaster and Carnegie sent to auction was sold in the pressure cooker, as stated in a Domain Group report.
Aside from these suburbs, the entire Melbourne auction clearance rate sat at 73.8 per cent for the month of February. While house prices in Melbourne might be rising, their popularity is certainly matching the increase. In fact, the five suburbs proving the most successful at auction were outside of the inner-city ring that has been so popular with Melbourne's expansion, and that shines some light on how much demand there is for property outside of the more 'stylish' areas closer to the CBD.
This is clearly great news for sellers, but is it good for buyers too? Anybody seeking to invest in property should be looking at the most viable way that they will be able to snap up the one patch of paradise that they're keen on, and keeping in mind the success of auctions around the city would be wise.
Suburbs such as Box Hill are not only outside of the regular upward-trending areas of inner Melbourne, but are projected to grow a significant amount in the coming years.
Smart Property Investment lists the median house price in Box Hill at $1,380,000. Such a high median value should point away from high clearance rates, but the demand for Victorian property is such that this is not the case. Even better for property investors, the projected median growth over the next three years sits at a whopping 81.22 per cent, and over five years that figure only drops to 64.29 per cent. Demand for property in the suburb won't reduce that number either, and some serious capital gains could be seen.
How does the rest of Melbourne compare?
While five suburbs showed 100 per cent clearance rates, there were five more above the 90 per cent mark.
BIS Shrapnel Australian Housing Outlook 2015-18 reports that the median house price in Melbourne overall is $734,300, which is only a little over half of the median for Box Hill. That figure increased 28 per cent over the two years prior to June 2015, while inner ring suburbs grew 39 per cent. The outer ring however, which includes suburbs such as Box Hill, only grew 17 per cent in that same time.
Domain Group actually found that while five suburbs did have 100 per cent clearance rates, there were five more above the 90 per cent mark.
"If you're a seller, you wouldn't be complaining about the way the Melbourne market has started ," said Chief Economist at Domain Group Dr Andrew Wilson of the Melbourne market.
Dr Wilson also listed the median auction clearance price as $799,000 – above the median city price, but well below the median for Box Hill. That is great news for prospective buyers.
The Commonwealth Bank/CoreLogic RP Data Home Buyers Index (HBI) for October 2015 ranks areas between 1 and 5 based on which area of the market they are favouring. Victoria was listed as a 4, which indicates a seller's market, but Melbourne more specifically came in at 5, or an extreme seller's market.
So why is Melbourne seen as a seller's market when auction clearance rates are so close to the median house price for the whole city? Demand. And it's that demand which points towards getting a foot up and over the competition in order to purchase the property that you want.
Adding exactly what you need
There will always be a dream property in mind for anyone looking at investing or purchasing, but finding the exact house to match could be difficult. However, in February there were an average of 1,186 new house listings in Melbourne every weekend. With that number increasing the available properties on the market regularly, you're sure to find what you have in mind.
The tricky part is buying it in a busy auction room.
When you employ a specialist buyer's agent, you can rest assured knowing that the person giving you advice and standing by your side at auction knows exactly what they're doing. Their experience in buying properties will shape the strategies they implement when bidding alongside you and your specifications, and having an expert in the room will be a great boost to your chances of buying your perfect property.