What is the market *really* doing?

Amidst doom and gloom media stories, speculation about interest rate increases weakening our market, and a general feeling of malaise for about the outlook for our local property market, the market continues to challenge such claims. Even on a public holiday long weekend, (which has followed a previous school holiday long weekend) our auction clearance rates have defied the chatter in the media. Granted, 66% is hardly an aggressive seller’s market, but it’s certainly not indicative of a buyer’s market. And that’s just if we take the lower of the two reported clearance rates this Sunday morning.

Journalists often reach out to mortgage brokers, selling agents and buyer’s agents, and the reason they do this is to take advantage of some real-time, coal face intelligence. Occasionally, the information they glean from such professionals can be considered leading market indicators, particularly when it comes to finance and pre-approval activity.

This week’s auction activity has certainly delivered a vibrancy that I didn’t anticipate. I assumed a second long weekend, public holiday, (that was also straddled over our Victorian school holidays) would be an auction no-go zone for agents, but I was mistaken. Our auction activity spanned across four particularly different properties, and while four data points are not necessarily enough to constitute a trend line, they certainly illustrate my point about the market conditions being quite different to what is currently purported by the media.

The first auction was bought forward and actually finalised on the morning of Good Friday. Clearly, there is little rest for real estate agents. The period home in one of Newport’s pretty streets to the west of the station was due to go under the hammer this weekend, but our early pre-auction offer triggered a showdown and four of us battled it out eight days prior. The property was on the market around the top of the quoted range and sold for almost $100,000 more when competition fought it out. Our clients were disappointed, but philosophical.

Talk of interest rates, global unrest, inflation and a looming federal election didn’t slow down these buyers.

The next property to go under the hammer was a popular beauty, but one that was relatively hard to appraise. The meticulously renovated, Victorian stunner on a generous parcel of land in Geelong could have easily been compared to other $2M+ properties in the locale, except for two aspects. Firstly, it is situated on a busy road. But secondly, it is in a lesser land-value suburb than the other fancy addresses, such as Newtown and Geelong West. While this beauty literally sits across the road from houses bearing the Newtown postcode, this address is Herne Hill. Not that Herne Hill isn’t superb, but a sale touching $2M was always going to break a price record for the area.

Appraised at circa $2,000,000 by us, multiple bidders were in attendance and eventually two emotionally charged bidders battled it out some quarter of a million dollars above our circled appraisal. The hammer fell at $2,270,000.

Clearly their reluctance about the postcode and the busy road was over-imagined on my part.

The second property yesterday was also regional. We assisted a lovely couple with a beachside dream, and disappointingly, others felt similarly about the opportunity that this superb address offered too. Another advocate’s client took the keys at $2.02M.

What was intriguing for me was the sheer appetite for a coastal holiday opportunity that still required building permits, materials surcharge and building contracts.

Surely, if the market was deteriorating, these types of results would not be featuring?

The last property to go under the hammer was a fabulous 3BR townhouse in Brunswick East yesterday afternoon. We had applied what we considered a well thought-out stretch budget. There were five active bidders, (possibly more who may not have got a chance to get their bid in), and the popularity of this townhouse demonstrates our increased appetite for city-proximity living again. Located south of Glenlyon Road, a short stroll to Barkly Square shopping village, and easily accessible to the city by light rail or by foot, it was unsurprising that so many were keen to bid for this gem.

Our stretch budget was not just surpassed, it was smashed. The hammer fell at a price tag of $1,052,500.

I can’t, (and won’t) downplay the impact of the newsfeed items that are giving many buyers some jitters, but what I will point out is the traction that quality properties have in this current market. Competition is still palpable and even in regional or holiday hotspots, market conditions are still favouring sellers.

It is the sellers with either unfair expectations or compromised properties that are experiencing softer conditions.

The following three weeks will be interesting to observe, as political agendas get louder and policies become clearer, however people will do what they always do when change is potentially imminent; they’ll opt to do nothing.

These next three weeks may spell opportunity for considered purchasers.

The critical tip I have for them is to avoid compromised properties.