The winter selling season, traditionally the slowest in the Victorian property year, maintained the momentum built up during the bumper autumn.
By the end of August, more than 24,000 auctions had been held across the state and 87 suburbs within 10 km of Melbourne’s CBD had joined the million-dollar median club.
On December 31 the median price for inner Melbourne was less than $1 million, but by March it was $1,014,500. By the end of June, it was $1,026,500 – another record in the city’s biggest property boom.
By August 10 there had been 21,769 auctions held in Victoria, with a clearance rate of 71 per cent. This was up on the 17,085 at the same time last year (with the same clearance rate) and a big increase on the 14,609 in 2012.
Topping the list with the most auctions was the huge northern suburb of Reservoir with 357, followed by in-demand Richmond, South Yarra and St Kilda. Fifth on the list was Preston – like Reservoir, benefiting from the high prices in neighbouring suburbs such as Fitzroy North, Northcote and Brunswick, with priced out buyers moving further north.
In a strong auction market, every seller’s ideal is a hot contest at auction. Clearly, for a seller to accept an offer before auction, it usually means that it is too good to refuse. A further indicator of the strength of the Melbourne market has been the increase in the number of homes sold before auction – about 14 per cent this year.
That is up 1 per cent on last year and is the highest rate for four years, although not yet at the 21 per cent of 2007 when the market was running hot.
The suburbs with the highest share of homes sold before auction also reflects recent trends in price movements – with inner suburbs becoming increasingly unaffordable to buyers on a budget who move their search to the middle ring.
This has meant intense competition for suburbs with good transport links, facilities such as schools and parks, and with convenient access to the city.
The auction boom has encouraged others to sell their homes this way, even in areas traditionally dominated by private sales. This year, 34 per cent of homes have been sold by auction, compared with 26 per cent last year. There were about 33,000 private sales by the end of August.
REIV, September/October 2013
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