This weekend saw the strongest result in the Melbourne auction market since the end of the boom in 2007 with 452 auctions reported and a clearance rate in excess of 80 per cent. Strong results earlier this year were attributed to a supply shortage, however as stock levels have risen to 2006 levels the result is more a reflection of the impact of improved affordability, demand increases due to population increases and the generous financial assistance provided to first home buyers.

There were 452 auctions reported this weekend, 375 sold resulting in a clearance result of 83 per cent. There were 77 properties passed in, of which 44 were passed in on a vendors bid.

The next two weeks we expect to see just under 1300 auctions which is a very high number of auctions at this time of the year.

TOTAL AUCTIONS

This week: 452
Last weekend: 43
This time last year: 559

S Sold at Auction: 275
SB Sold before Auction: 80
SA Sold after Auction: 4

Passed in: 77
Passed in on vendor’s bid: 44

The average household produces about 14 tonnes of greenhouse gas a year, mostly through energy use, according to the Australian Bureau of Agricultural and Resource Economics.

The Council of Australian Governments has agreed to develop a national strategy for energy efficiency to help households prepare for the introduction of the Carbon Pollution Reduction Scheme.

The strategy is designed to substantially encourage and support innovation and improve minimum standards for energy efficiency.

Ways to achieve these include accelerating the introduction of technologies, improving regulatory processes and increasing the number of energy-efficient homes and commercial buildings.

From next year, new buildings will be constructed according to stringent energy-efficiency standards.

This strategy also aims to raise awareness of better energy use in existing buildings. People seeking to buy or lease properties will be provided with information about the energy efficiency of the buildings through proposed mandatory disclosure provisions, also starting next year.

Though the government’s policy is yet to be finalised, indications are that the onus of obtaining and providing documentation on energy efficiency will rest with the property owner, and mandatory disclosure of documentation will need to be provided when a dwelling is listed for sale or rent.

REIV analysis of Melbourne’s property market shows that the rental squeeze appears to be easing in Melbourne’s outer suburbs.

The vacancy rate across Melbourne has been reasonably consistent for the past 12 months, recording between 1 and 1.4 per cent. It is significant, however, that the outer suburbs are showing improvement in that sector; over the last six months the vacancy rate in this region has improved from 0.7 per cent to 1.8 per cent.

This may be due to the various government grants, bonuses and boosts combined with historically low interests rates, which are helping first-home buyers move from rented accommodation in outer suburban Melbourne and into their own homes. The Australian Bureau of Statistics adds further weight to the REIV’s analysis. ABS data for March reveals that the number of owner-occupied housing commitments increased in Victoria by 2.3 per cent and that the number of first home buyer commitments as a percentage of total owners increased from 26.5 to 27.3 per cent.

The REIV March quarter median prices showed that most of the activity in the marketplace has been in outer suburbs such as Craigieburn, Melton South, Hillside, Epping, Werribee and Meadow Heights, all popular with first-home buyers.

In the three key regional centres, the vacancy rate in the Geelong region has dropped from 2.6 to 2.3 per cent, stayed at 1per cent in Bendigo and dropped from 1.5 to 1.4per cent in Ballarat.

It is great news for renters if a byproduct of the grants, bonuses and boosts is an improvement in the availability of rental accommodation. We will need to monitor the situation over the next few months.

REIV CEO Enzo Raimondo said that the extension of the assistance would help thousands more first home buyers purchase their first home.

“As of the 1st of July a first home buyer in Victoria will be eligible for $16,000 for an established home and $12,500 after 30 September in combined assistance from the State’s grant and bonus and the Federal government’s boost.

“Without the decision in both budgets first home buyers would have been left with only the $7,000 grant.

“The REIV welcomes not only the extension but the sensible decision to phase the boost out rather than end it suddenly.

“Phasing the boost out is a far better decision than letting it stop immediately. It will result in a smoother transition and reduce the pressure on first home buyers.

“The assistance for first home buyers has been a key driver in the local property market and I look forward to its continued benefit into the spring selling season,” Mr Raimondo concluded.

First Home Owners Assistance – established homes 

Whilst the auction market continues to produce healthy clearance rates in the mid seventies it is the private sale market that is exceeding expectations. This is due to the fact that the median price of a house sold by private sale is lower than those sold at auction indicating that buyers in the middle and affordable segments of the market are dominating residential property sales.

There were 439 auctions reported this weekend of which 256 sold resulting in a clearance rate of 76 per cent. There were 106 homes offered at auction passed in, of which 70 were passed in on a vendors bid.

The REIV is expecting just under 500 auctions next weekend and then just over 500 for the following two weekends.

TOTAL AUCTIONS

This week: 439
Last weekend: 388
This time last year: 642

S Sold at Auction: 256
SB Sold before Auction: 73
SA Sold after Auction: 4

  Passed in: 106
Passed in on vendor’s bid: 70   Clearance rate: 76%   Postponed: 2
Withdrawn: 1
Auctions with no result: 41   PS Private Sales: 740   Total Volume (Auctions): $216.57mil Total Volume (Private Sales): $291.06mil   Total Auctions Houses: 286
Clearance Rate: 76%
Median Price: $607,750   Total Auctions Flats/Apartments: 140
Clearance Rate: 77%
Median Price: $446,750   Total Auctions Vacant Land: 13
Clearance Rate: 69%
Median Price: $386,000   House Sales in Detail
  TOP 5 HOUSES
1. 4 Turnbull Avenue, Toorak $2,360,000
2. 4 Blythswood Court, Kew $1,950,000
3. 130 Were Street, Brighton $1,875,000
4. 31 Gipps Street, East Melbourne $1,850,000
5. 10 Elphin Grove, Canterbury $1,700,000   TOP 5 BARGAIN HOUSES
1. 40 Burleigh Road, Melton $195,000
2. 8 Nambet Place, Kurunjang $224,000
3. 10 Hornbuckle Crescent, Melton $242,400
4. 76 Wright Street, Sunshine $252,500
5. 4 Widdy Court, Sunshine West $255,000   Flat/Apartment Sales in Detail
  TOP 5 APARTMENTS
1. 3/366 Beach Road, Black Rock $1,600,000
2. 3/545 Toorak Road, Toorak $1,400,000
3. 47/350 Beaconsfield Parade, St Kilda West $1,200,000
4. 4 Bedford Street, Collingwood $1,060,000
5. 22A Lindsay Street, Mckinnon $839,000   TOP 5 BARGAIN APARTMENTS
1. 5/32 Empire Street, Footscray $177,000
2. 15/13 Ormond Road, Footscray West $185,000
3. 1/18 Ranfurlie Circuit, Melton West $215,000
4. 3/13 Lambert Street, Richmond $239,000
5. 9/10 Station Street, Fairfield $250,000

The decline can be directly attributed to continuing economic uncertainty and a lowering of investor and consumer confidence.

The figures highlight the importance of the financial assistance provided to first-home buyers, which has been a critical factor driving demand in the past few months.

That 15 of the 20 top growth suburbs for the quarter have a median price of less than $500,000 is a sign of first-home owner activity because the maximum grants are available only for homes below that value.

Four suburbs recorded double-digit growth in the March quarter (as in the December quarter).

In March, Doncaster East topped the list at $637,550, up from $531,000, an increase of 20.1 per cent (and 6.8 per cent in 12 months); Mount Martha rose from $430,000 to $500,000 (up 16.3 per cent); Keysborough climbed to $380,000 from its December figure of $336,000 (up 12.9 per cent); and Brighton East grew 10.8 per cent to $972,000 from $877,500.

Key centres in regional Victoria have recorded a wider diversity of results, with the median house price in Greater Ballarat increasing 8.2 per cent from $227,500 to $246,250; in Greater Bendigo it grew 0.8 per cent from $240,000 to $242,000; and in the City of Greater Geelong it fell 3.8 per cent, from $329,000 to $316,500.

The 2009 March quarter median price for a unit or apartment was $360,000, compared with the December 2008 figure of $365,000.

The relative stability in the apartment market can be attributed to a consumer rush to claim federal and state government first home buyer financial assistance. At a time when the rental market is still tight and interest rates historically low, this incentive to buy is reflected in only a slight lowering of the quarterly median.

Brighton topped the list of the most expensive suburbs for units and apartments, with a median of $685,000. In fact, all suburbs in the top 10 were valued at more than the overall March median for this market sector.

In the top five most affordable suburbs, Carlton, which is dominated by student housing, was the most affordable with a median price of $205,000, ahead of Werribee, Footscray, Frankston and Sunbury.

The market is being driven by a combination of an increasing population, improving affordability and the grants for first home buyers. With most of the grants forecast to cease on June30, the health of the economy will be the factor that determines house prices in the second half of the year.

The clearance rate from this weekend’s 388 reported auctions was 77 per cent, a result that indicates strong underlying demand due to improved affordability, increasing population and generous grants for first home buyers.

There were 388 auctions reported this weekend, of which 300 sold and 88 were passed in, 54 of those on a vendor bid.

Over the next three weekends, there will be plenty of choice for buyers as the REIV expects just under 500 auctions each weekend.

TOTAL AUCTIONS

During the year to June 30, Melbourne’s population grew by 74,600 people. To put this figure in context, Melbourne’s population growth was 20,000 more than Sydney’s and 57,000 more than Brisbane’s.

It is no secret that Melbourne’s rental market has been critically tight for several years and the strong population growth is continuing to add to the rental squeeze. There has been some easing in demand for larger, more expensive residential rental dwellings this year. But more affordable houses, townhouses, units and apartments are continuing to attract significant demand.

For most of the year, Melbourne’s auction market has recorded clearance rates in the mid-to-high 70per cent bracket. While population growth is driving demand, the low interest rates are also a major factor.

These two factors, combined with a very low level of supply of dwellings, means that there is hot competition for homes for sale and auction.

There has been an undersupply of new dwelling approvals for a considerable time.

The latest ABS data for dwelling and unit approvals in Victoria points to a seasonally adjusted increase of 5.5 per cent, however this does buck a long-term trend.

Significant private-sector investment and progressive government policy are required to drive new dwelling approvals before Victoria’s housing market can move to a more balanced position.

The Domain Approved campain is the new way to sell your home in Melbourne.