The heat in Melbourne's Inner City Property Market continues.

The inner areas of Melbourne are continuing to rise despite the drop in the share market and the interest rate rise.

A two bedroom single fronted Victorian Terrace home at 47 Birkenhead Street, Fitzroy North which was well laid out, but required a new roof sold for $655,000. Before auction the agent estimated that the property would fetch $550,000.

Brunswick continues to achieve high prices as well. A single fronted Victorian Terrace Home at 19 Richardson Street sold for $525,000. The property had a very unusual lay out, with a barely functional galley kitchen.

I read an interesting article in Saturday's Age which mentioned that the inner areas were becoming the domain of the wealthy. The article mentioned the Council of Port Philip in particular, and stated that a family would need to have a combined family income of $175,000 to afford to purchase a basic home in the area.

The article went on to mention that the middle class was being forced out of the area, and now there was an unequal social division. The very wealthy and the very poor (People who lived in Housing Commission Towers) were living alongside each other in various inner suburbs within Melbourne.

Do others think the heat will come out of the inner market? Or do people think that the rise in prices is set to continue?

What will be the consequences of continual price rises in the inner areas?

Regards Jason.

Williamstown

The property at 87 Dover Road, Williamstown:

Was quoted $680k to $750k - sold at auction yesterday for $790k

Nice position BUT laundry is in outbuilding and there is no carparking

So Jason it hasn't slowed yet

Chris

http://www.realestate.com.au/cgi-bin/rsearch?a=o&f=0&p=10&t=res&ty=&c=42220855&s=vic&snf=rbs&tm=1186903044&id=104138517&gts=1&gts-suburb=WILLIAMSTOWN|vic

A house got sold for over 2 mil in Camberwell on the weekend.

My partner has also been working on a major reno in Camberwell. The builder bought it for over a mill and apparantly it was a dump. The house has a pool and tennis court and the builder is hoping to sell for 2mil once it's completed.

With recent events I am watching this market for any changes, auction clearance etc.
Could locals please keep us posted.

Cheers

MTR said:

With recent events I am watching this market for any changes, auction clearance etc.
Could locals please keep us posted.

Cheers

Click to expand...

Hi MTR,

The market is still very strong in Melbourne - 84% clearance rates this weekend.

Cheers,
Jen

MTR said:

With recent events I am watching this market for any changes, auction clearance etc.
Could locals please keep us posted.

Cheers

Click to expand...

Hi MTR,

The auction clearance rate was still 85%. Prices seem to be strong in the inner areas. There are a lot more auctions scheduled for 1 September. It will be interesting to see the prices achieved then.

Regards Jason.

Went to an auction in Carnegie yesterday.

The property was a large 4 bedroom/3 toilet/2 gge townhouse on a busy road.

Agent's vendor bid $600k. Not a peep from the large crowd. Passed in.

Same happened to a smaller townhouse around the corner a few months back.

The local market appears strong but patchy. Edwardian, art deco or Californian Bungalows sell well (for their architecture) as do 1960/70s villas/flats (for their location). But people won't pay dearly to get a new place in a character suburb.

Peter

I would have thought it was location that is driving demand - but I guess wrong character in a burb is also reason not to buy...

AND I forgot to mention that a character 1920 4br 1ba detached house on the same busy road with not even a carport sold with good competition for about $760k.

The difference can't even be attributed to land content; the block was only about 350m2, not much different from the townhouse (which remains unsold when I passed it today).

Melbourne inner city market still hot mad: - we want to buy!).......auction rates 85% clearance again.

We decided to look outside the square this weekend and went and checked out Craigieburn/Roxburgh Park - quite a few reasons for this, one being that we looked into it pretty heavily about 2 years ago, and prices haven't moved much - the area historically has around 7-10% growth p.a. and decent yields - so perhaps it's in for a bit of a boom (although I've heard 10% growth in that past quarter - haven't seen it from what we looked at 2 years ago) - and oh dear, I've had RE agents calling me ALL day!! Haven't had that in ages after visiting the inner city properties!

Does anyone here have any investments in Craigieburn/Roxburgh Park areas? I'd be interested in your thoughts.

Cheers,
Jen

JenD said:

Melbourne inner city market still hot mad: - we want to buy!).......auction rates 85% clearance again.

We decided to look outside the square this weekend and went and checked out Craigieburn/Roxburgh Park - quite a few reasons for this, one being that we looked into it pretty heavily about 2 years ago, and prices haven't moved much - the area historically has around 7-10% growth p.a. and decent yields - so perhaps it's in for a bit of a boom (although I've heard 10% growth in that past quarter - haven't seen it from what we looked at 2 years ago) - and oh dear, I've had RE agents calling me ALL day!! Haven't had that in ages after visiting the inner city properties!

Does anyone here have any investments in Craigieburn/Roxburgh Park areas? I'd be interested in your thoughts.

Cheers,
Jen

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Hi Jen,

Where are you looking in the inner areas? I am also looking, and being more amazed by the the ever increasing prices being achieved each weekend! When is it going to ease??

I know what you mean about the inner city agents. Don't they look smug lately!!! I've given up asking them for a price range, because they always give me an indirect answer!

Regards Jason.

jingo said:

Hi Jen,

Where are you looking in the inner areas? I am also looking, and being more amazed by the the ever increasing prices being achieved each weekend! When is it going to ease??

I know what you mean about the inner city agents. Don't they look smug lately!!! I've given up asking them for a price range, because they always give me an indirect answer!

Regards Jason.

Click to expand...

Where haven't we been looking is a better question!!

You could probably list every/any inner city suburb and we've been watching it.....can't quite justify the low yield returns (on units) - we're totally priced out of the houses (looking in the 300k range) - we like to have properties (if they're units) that get somewhat close to paying for themselves (i.e. min 5-6% return - protection in case of a market downturn, if we turn into a single income we can still afford them, and it also keeps us in the position to be able to keep borrowing to buy more, etc, etc - adding value is a fine way of doing this, but prices for unrenovated units still aren't showing value for me now) and with such a massive demand right now, there's no room for negotiation .......negotiating is half the fun of buying!

I think we've got little to no chance right now in the inner east/inner south east (where our properties currently are ) (been looking everywhere and anywhere between South Melbourne and Bentleigh) - so looking a bit more inner north (Brunswick, North Melboune, Ivanhoe, Fairfield, Moonee Ponds, etc) - although we're seeing very similar demand - so went outside the square this weekend and checked out Craigieburn/Roxburgh Park area for houses (the idea of the tenants paying the water bills is a definite bonus for houses! - which are cheaper than the smallest unit you could find inner city - but still what I consider to be a nice, safe suburb) - still not sure about whether it would be a good decision or not.......

I think we're a bit stuck on the mindset influencd by all the gurus out there always talking about the inner 10km CBD radius which is where all the growth is.......yes, our inner city units are doing nicely (but we found or created units with 6% return, so they're easy for us to hold) - and with the inner market rising so much at the moment, I expect it will filter out to the "burbs" relatively soon, the Craigieburn/Roxburgh Park area has around 10% historical growth from my research........same with the inner city areas we are invested in now.....the inner city has risen at least 10% in the past 6 months from my experience, outer hasn't moved much.......

........yes, I'm thinking outloud!! Anyone out there with knowledge of the Craigieburn/Roxburgh Park area would really help right now!!

Cheers,
Jen

we're totally priced out of the houses (looking in the 300k range)

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You can buy a a house on a full block in Heidelberg west for low to mid 300's. You can get one for below 300 if you can handle a "renovate or detonate" type.

Tried to help a friend buy at auction on Saturday. Advertised at $525 plus. They had limit of $620K Agent thought it might get near $600K. Went for 675K after furious bidding between 7 people. And it only had two bedrooms. Ahhhhhh

So the Northcote prices have now moved to Thornbury.

i purchased a property in hawthorn for a steal - $420,000.
quiet street, early 60s house, and close to glenferrie rd.
the vendor had to sell as she overextended herself with a few rental properties.

timing is crucial i guess.

Well done! Was it an auction? Private sale? That sounds mighy cheap to me!

funny enough the property was on the market for 3 weeks before i picked it up. apparently because the price was so cheap, many people didn't even consider looking at it. it was a private sale, advertised in the paper

Inner City Melbourne Market still blazing...

Hi,

I went to an auction today at 42 Erskine Street, Nth Melbourne. (2 bedroom terrace home, renovated). The house is small, but has off street parking. I nearly fell over at the result. I expected around $650-$670. It went for $740!!!!!!!! There were gasps from the crowd of around 100 people. There were four or five serious bidders, and in the end two guys were competing against each other. The bidding was very competative.

This market in Melbourne seems to be very strong at the moment. However I don't know how long prices can keep rising for. In view of the strong prices rises this year, I would think that the market would have to level off soon. What do others think?

I have attached a link to the property below.

http://www.realestate.com.au/cgi-bi...eader=&c=67783663&s=vic&snf=ras&tm=1188621090

Regards Jason.

Hi Jason
that's amazing price, cute home.

I am curious do you think it was an investor who purchased? Did you get any idea on the mix, in terms of buyers at the auction?

I would like to know what is driving this market. Maybe everyone has discovered what a great place Melb is.

Cheers, MTR

MTR said:

Hi Jason
that's amazing price, cute home.

I am curious do you think it was an investor who purchased? Did you get any idea on the mix, in terms of buyers at the auction?

I would like to know what is driving this market. Maybe everyone has discovered what a great place Melb is.

Cheers, MTR

Click to expand...

Hi MTR,

I really don't know if the people who purchased were investors, or OO's. One of the bidders was a lady who would have been in her mid 50's. The final bidders who were left competing against each other were both Chinese men in their mid to late 40's I would guess. It is difficult to know whether they purchased for their children to live in to attend uni, (Nth Melb is very close to Melb Uni) or whether they intend to live in the property themselves. I didn't see their children, so I am only guessing.

If it was an investor who purchased the property, the yield would be very very low. The house would rent for between $380 and $400 a week.

The house is very cute, and I was initially interested. But not at the final price!!! I wouldn't have stood a chance! I could have started the auction off, but that is about it!!

Regards Jason.