There were a reported 904 properties auctioned in Melbourne at the weekend, with clearance rate of 81%. Of those sold 85% were houses and 74% being units.
Andrew’s Comments: Owner occupiers finding the bidding tougher going than investors.
The Inner suburbs had the most auctions (231), with a clearance rate of 71.1 per cent. Meanwhile, the strongest clearance rate was recorded across the south east and outer east, where 9 in every 10 homes taken to auction sold.
Andrew’s Comments: The ‘powerhouse’ south east and outer east, demand seems insatiable.
Strong demand from a growing population and record low interest rate is driving the market. But, many would have us believe the market is in in a bubble driven by an unsustainable frenzy soon to result in a crash for residential property.
Clearly Melbourne is in a growth phase, which will eventually equalise – when and why is a little more difficult to pinpoint. But, what’s clear is there’s still growth to be had, and when price growth does stabilise there will be no significant price correction. But why? Because demand for property is strong as a result of Melbourne’s growing population.
Andrew’s Comments: WBP is well placed to make this call, it’s the third largest ‘bank trusted’ valuer and runs its own property advisory service, so it’s not only out there valuing for the banks it’s running the gauntlet for its clients at the ‘coal face’.
Many proponents of the “bubble” theory reference the strong results at auction, in which reserves are significantly exceeded, as evidence of an imminent crash. Yes, there has been some outstanding results achieved in recent months – results that are interspersed with an equal number of results that fall
Andrew’s comments: So called experts have predicted the last dozen boom/bust bubbles that never eventuated, remember “Prof Steve Keen”.!!
Source: WBP Property Advisory
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