Melbourne’s real estate industry is experiencing a massive boom. Premium properties are being aggressively pursued by a horde of potential buyers, making business brokers in Victoria very happy.
The month of June experienced the highest bidder participation, with the Domain Group garnering a 72 percent clearance rate, from 780 reported auctions.
Furthermore, buyers competed for renovated properties all across the city, as well on properties with massive redevelopment potential.
The auctions were so competitive that each of the auctions were lengthy and drew major numbers of up to 50 bids from three or more participants.
Nelson Alexander Sales Director Arch Staver was the one who took bids from the auctioneers of a four-bedroom Edwardian House, which is requiring some needed renovation. The property is located at 407 St. Georges Road in Fitzroy North.
The property had a starting bid of $1.2 million, but was sold to an owner-occupier for $1,652,000 – $452,000 more than the original price.
According to Staver, the resurgence of the real estate market is an anomaly since factors like the federal election and the Brexit referendum, which is about whether the United Kingdom should leave the European Union, usually deter buyers.
Staver said, “There are so many reasons for people to not be bidding aggressively yet, interestingly, they are.”
He said that the lack of quality property in the North, may be the reason why buyers are hell-bent on auctioning for properties, adding, “Buyers are having a red-hot go, and when you have three or four bidders at any given auction, it means there are not enough properties available to satisfy the demand.”
In Hocking Stuart, the area witnessed five $3 million-plus auctioneers competed for a five-bedroom contemporary home, which is located at 46 Sims Street in Sandringham.
Additionally, Domain Group Chief Economist Andrew Wilson said that Melbourne’s north, west and south-east regions are experiencing an all-time high because of good-value buying.
Wilson said that at this rate, the overall market will maintain its momentum.
According to Domain, they noted that the market trend of intensified auction combat is due to lower borrowing costs, fewer listings of quality properties and a “whatever it takes” attitude of some buyers.
In addition, Reservoir, a 12 kilometre stretch north of the CBD, was the top auction location as it hosted 13 auctions.
Reservoir, known mostly as a working class area, is now undergoing massive gentrification, touted as an up and coming area.
Miriam Sandkuhler, a buyer’s advocate from Property Mavens said, “It is getting a lot of spillover from Brunswick and Northcote types, who can’t afford to buy there but are seeing better value in the likes of Reservoir and Preston. You can buy very well in Reservoir for $700,000 to $800,000.”