Agents Look To Promise Of Spring Market
The Sunday Age
Sunday August 10, 2003
Agents see a gleam of light at the end of the winter tunnel, writes Cameron Houston.
AUCTION clearance rates eased back to 76 per cent yesterday as stock levels continued to slide, with just 572 auctions across Melbourne.
While some agents say listings have improved for next month, others say they will soon be reading the employment section of The Age rather than the real estate classifieds.
In Brighton yesterday, Buxton Real Estate director Leigh Hallamore sold six of eight houses at auction and was buoyed by a wave of new listings for the first two weeks of next month.
He predicted the recent shortage of stock may be coming to an end, at least in Brighton, as vendors are tempted by sustained price rises in the area.
Mr Hallamore said Buxton's best result yesterday was the sale of an old Edwardian house on a subdivided block at 18 Glyndon Avenue - in Brighton's exclusive ``golden mile" - for $1.725 million.
The inner-west market continued to record strong results. Suburbs such as Seddon, Footscray West and Yarraville had become popular with young couples, Jas H. Stephens director Craig Stephens said.
Jas H. Stephens sold five of six properties, with the best result at 64 Severn Street, Yarraville, which netted $364,000 after an opening bid of $340,000. Mr Stephens said the ``knock-out" opening bid was becoming a common auction tactic.
Barry Plant Doherty's Reservoir office sold four from four yesterday, with a 75 per cent clearance rate across Melbourne.
Reservoir director Harry Kontossis said a renovated weatherboard house at 7 Clarence Street, Regent, sold for $441,000 after going on the market at $400,000. Soaring prices in Northcote, Coburg and Preston had driven buyers further north, he said.
The median house price in Reservoir had increased 121 per cent to $275,250 from March 1998 to March this year.
In Ascot Vale, Thomson Real Estate agent Ryan Currie said the firm had picked up 13 listings for next month but stock levels were still well down on last year. He said the dearth of Melbourne clubs in this year's AFL finals might increase the number of listings for next month.
Thomson's sold five of six properties yesterday, including a triple-fronted art deco house at 108 Mooltan Street, Flemington, for $606,000, well above the reserve of $535,000. Mr Currie said demand from young couples for unrenovated houses had underpinned strong results in the inner north.
South Yarra's Castran and Gilbert director Paul Castran sold four from six after negotiating the pre-auction sale for $3 million of a property with planning permits at 924 Toorak Road, Camberwell.
Mr Castran said recent changes to the auction process had contributed to a rise in private sales and a fall in the number of auctions across Melbourne.
``If you're fishing in a pool and you've only got 70 per cent of the fish and buyer numbers remain constant, then clearance rates are bound to go up," he said. ``That's why we had a clearance rate of 78 per cent last week."
Mr Castran said he was unconcerned by growing confidence in global equity markets, with financial planners predicting investment funds would move from real estate back into shares.
Melbourne's Atchison Consultants released a report last week analysing the investment performance of 11 major asset classes in the past 15 years.
The study found residential property yielded the strongest returns at 13.6 per cent per annum, against an 8.4 per cent annual return from the Australian sharemarket.
Despite stronger returns and greater stability, direct property investment remains out of favour with financial advisers, according to Greg McMahon of the Australian Direct Property Investment Association. He said financial advisers reduced property allocations to the lowest levels on record before the start of the real estate boom in 1998.
Charter Keck Cramer research director Robert Papaleo is another analyst who believes investment portfolios need to lean more towards property. He said property prices were far more stable than other asset classes.
Buyers' advocate David Morrell said that while demand for premium residential property was strong, the apartment market was starting to show some cracks. ``We're starting to see Toorak prices in suburbs like Malvern but all the negative press about apartments is causing some very flat results," he said.
Mr Morrell attended an auction at 5 Chilecote Avenue, Malvern, and watched
six bidders push the price to $2,467,000 - yesterday's highest result.
HOT PROPERTY The result CLEARANCE RATE 76% SOLD 322 PASSED IN 135 SOLD BEFORE 97 SOLD AFTER 18 Total AUCTIONS YESTERDAY 572 ONE WEEK AGO 586 LAST YEAR 599
© 2003 The Sunday Age