Market snapshot: 6 Feb, 2012

Synergy’s 2012 market forecast

With the first real auction weekend now behind us, Melbourne’s property market is starting to warm up for 2012. The weekend’s clearance rate of 58 per cent should be viewed with caution given that the figure is based on only 112 auctions, and the majority of these were lower-end properties.

The coastal market was noticeably quiet during January with a low volume of transactions recorded. Estimates suggest around 20 per cent of holiday properties achieved good results and those that did sell well had future development potential or represented good value in a desirable location. Rural holiday properties within 90 minutes of Melbourne faced a similar fate with the rural market continuing to experience very quiet conditions.

Based on a number of conversations we’re having with clients and agents, we’re tipping that there’ll be a reasonable volume of transactions this year, with both buyers and sellers taking a more realistic stance towards pricing. In the final months of last year, buyers felt they had to purchase at a steal, whereas vendors tended to hold out on price. This year we believe there will be less of a disconnect.

We suspect that the market will comprise mostly home buyers with fewer speculative investors, who will watch from the sidelines until they feel more confident with the global economic climate. This could be good news for opportunistic investors who’ll face less secondary competition at auction, particularly on properties that don’t appeal to owner-occupiers.

Commercial agents are reporting good demand on quality retail properties with Superannuation funds continuing to target the sector. A number of off-market transactions were recorded in November and December last year but we predict that may have been the calm before the storm. With retail performance still struggling, many retail tenants are either asking for rent reductions or closing up shop. This means the plight of retail tenants is at odds with the demand for retail properties from buyers. If retail rents continue to fall further we’ll begin to see a negative impact on capital values.

If you’re planning on making a move in property in 2012, whether that’s upgrading the family home or purchasing an investment property, we’d be happy to share our market insights. Call us today on (03) 9827 3355 for a confidential chat.

Hugh Jones

TOTAL AUCTIONS

This Week: 112
Last Week: 66
This time last year: 189

S Sold at Auction: 53
SB Sold before Auction: 12
SA Sold after Auction: 0

Passed in: 47
Passed in on vendor's bid: 28

Clearance rate: 58%

PRIVATE SALES: 517

Total Volume (Auctions): $29.66mil
Total Volume (Private Sales): $239.52mil

Total Auctions Houses: 71
Clearance Rate: 56%
Median Price: $462,500
Total Value: $19,998,750

Total Auctions Flats/Apartments: 30
Clearance Rate: 60%
Median Price: $408,000
Total Value: $7,343,500

TOP 5 HOUSES

 1. 34 Auburn Grove, Hawthorn East $1,204,000
2. 167 Milburn Road, Keilor $1,092,500
3. 3 Pintail Close, Bundoora $732,000
4. 23 Warramunga Road, Bundoora $710,000
5. 1 Kinross Street, Hampton East $705,250

TOP 5 APARTMENTS

1. 158 Newman Street, Kensington $787,000
2. 17 Daisy Street, Essendon $721,000
3. 2B Naples Street, Box Hill South $638,000
4. 42 Coates Street, Bentleigh $540,000
5. 348B Bay Road, Cheltenham $491,500

Source: REIV
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