FYI Fin Review Opinion/observations

From: Michael Croft


Home prices still up
Feb 26
Mathew Chandler and Jacqueline McArthur

Australian Financial Review

Prices in Melbourne and Sydney's residential markets are still climbing, as low stock levels fuel bidding wars at auction.

And key rental markets, plagued late last year by high vacancy rates, have also picked up, with some prospective tenants facing huge queues at open house inspections.

Auction results over the weekend in both cities showed clearance rates at around 80 per cent. In Melbourne the 79 per cent clearance rate was just one point below the corresponding weekend of last year.

In Sydney - and only in the key eastern suburbs, lower north shore and inner-west market - bidders were seen four-deep at auctions. In one example, an unrenovated cottage in Redfern went for $215,000 above expectations, selling for $615,000. At North Bondi, $1.606 million was paid for a house without views, making it Sydney's most expensive semi.

Laing + Simmons principal Mr Tony Anderson said the demand-leading-supply situation was being replicated across the entire eastern suburbs, the lower north shore and pockets of the inner west.

"The real story is that stock is as tight as it has ever been, both to buy and to lease," he said. "There was a little period before Christmas last year where people were very concerned about vacancies."

In Melbourne, the Hocking Stuart group sold 96 properties from 116 auctions, with several selling well above reserve. However, the agency reported that rents for two-bedroom units were still below last year's levels.

It was a similar tale from agency Kay & Burton, whose agent Mr Ross Savas said phenomenal buyer inquiry but a lack of stock for rental and sales would drive the Melbourne market.

Meanwhile, the Commonwealth Bank-HIA Housing Report, released yesterday, showed the 13.3 per cent jump in house prices last year pushed the housing affordability index lower.
 
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Reply: 1
From: Jas




> And key rental markets, plagued late last year by high vacancy rates,
have
> also picked up, with some prospective tenants facing huge queues at
open
> house inspections.

I somehow doubt it. I went to a friend's place in Parramatta. His
block of units had 5 for lease signs out the front, with one offering a
free overseas holiday should you decided to lease the unit.

Doesn't sound like a huge demand for units to me...

Jas
 
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Sim

Administrator
Reply: 1.1
From: Sim' Hampel


If anything, they are experiencing the normal Jan/Feb rush that happens every year.

Wait for the next month or so... I suggest that the tenants will disappear again and vacancy rates will be way up there.

 
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Reply: 1.1.1
From: Mark Laszczuk


Sim,
Hope you're right on that one mate, my partner and I have to move early April. Got the rental listings about two weeks ago to have a squizz, and noticed just how much stock was available. Same time last year, really struggled to find something in our price range, today we have a pick of ten or more from each agency, and some of them are in better positions than where we are now (in the same suburb - St. Kilda). Looking forward to picking up a bargain.

Mark
'no hat, some cattle'
 
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