With the sun out on Saturday, large crowds attended many auctions in the inner and middle-ring suburbs as the market continued to strengthen for sellers.
The Domain Group posted one of the highest clearance rates of the year, with 76 per cent of auctioned properties selling from 397 reported auctions. The results of a further 124 scheduled auctions were not reported.
The group’s chief economist, Andrew Wilson, said: “Today’s result is a remarkably robust result for July – it indicates that Melbourne is in a rising market.”
College zone: 237 Jasper Road, McKinnon sold for $2.04 million. Photo: Supplied
The top weekend auction clearance rate seen so far this year was 77.9 per cent, recorded in February.
“Now that the federal election is over, people are certainly thinking about putting their houses on the market,” Hocking Stuart director Andrew James said.
“The numbers coming through open for inspections are incredibly high at the moment just through a lack of property on the market, the school holidays and a bit of uncertainty. That is probably helping the houses on the market because there’s not a lot of choice.”
Owner-occupier buyers face other headwinds. These include investors more aggressively contesting properties in Melbourne, which is intensifying pressure on first-home buyers and young families looking to upgrade.
Agents in the northern and western suburbs have seen an upsurge in activity by local “mum and dad” and interstate investors since the July 2 election was called in May.
There’s also been a spike in investors beating owner-occupiers in contests for single-fronted cottages in the inner city and inner north in recent months, agents say.
Barry Plant director James Hatzimoisis said some prospective investor buyers held back because of the election.
But a significantly larger group decided to buy because of low borrowing costs and concerns about Labor’s policy to restrict negative gearing tax concessions from 2017.
“We had investors saying we’d better get on and buy because if Labor get in and muck around with negative gearing and capital gains tax, at least we will have a property and it won’t be retrospectively affected,” Mr Hatzimoisis said.
“Investor buying was up right across the north-west zone in May and June. It wasn’t confined to one area.”
Dr Wilson said Melbourne’s market would show a small but solid price rise over the June quarter in median price figures to be released in the next fortnight.
He said the quarterly growth rate in the Melbourne median house price (currently $726,962) would be very similar to the 1.5 per cent growth recorded in March.
“The lower priced part of the market has done better this year,” Dr Wilson said.
“The higher priced parts of the market, particularly in the east, have not done as well as they have previously.”
A $270,000 difference between Sydney’s median house price ($995,804) and Melbourne’s median, is also enticing Sydneysiders to study our market.
Mr Hatzimoisis said interstate investors looking at Melbourne’s north and west tended to be uninterested in townhouses and units: “They want to buy a standalone home. For $600,000 or $700,000 they can buy a beautiful property in Taylors Lakes or Taylors Hill and they can’t do that within 25 kilometres of Sydney’s CBD.”
Investor lending data indicates that investors account for 30 to 45 per cent of property purchases in Melbourne, with the figure varying according to economic conditions.
Another 542 auctions will be held next weekend.