Melbourne's heating up...

Jake Milne

Jake Milne

Even though we've had a two year glut; many of you would have noticed by now that Melbourne's clearance rates have been holding firm above 70% (50%-60% in 2012) for several months now, we haven't really seen a lot of run away results at auction... until now.

On Saturday, I saw three auctions within the inner suburbs and it is clear that Melbourne is on the move.

E.g.

Beach Ave - Most recent comp (in better condition) was $580,000.

http://www.realestate.com.au/property-apartment-vic-elwood-114617475

SOLD - $615,000



Adams Street - Expected sale price $500-$550 with a chance to go higher.

http://www.realestate.com.au/property-apartment-vic-south+yarra-114627511

SOLD - $687,500



Park Street - Expected sale price low-mid 600's.

http://www.realestate.com.au/property-apartment-vic-st+kilda+west-114583467

SOLD $715,000


Once the AFL Grand Final has concluded the market will be in full swing and I dare say most inner areas will be seller's suburbs.
 
Jake Milne said:
Even though many of you would already know that Melbourne's clearance rates have been holding firm above 70% for several months now, we haven't really seen a lot of run away results at auction... until now.

On Saturday, I saw three auctions within the inner suburbs and it is clear that Melbourne is on the move.

E.g.

Beach Ave - Most recent comp (in better condition) was $580,000.

http://www.realestate.com.au/property-apartment-vic-elwood-114617475

SOLD - $615,000



Adams Street - Expected sale price $500-$550 with a chance to go higher.

http://www.realestate.com.au/property-apartment-vic-south+yarra-114627511

SOLD - $687,500



Park Street - Expected sale price low-mid 600's.

http://www.realestate.com.au/property-apartment-vic-st+kilda+west-114583467

SOLD $715,000


Once the AFL Grand Final has concluded the market will be in full swing and I dare say most inner areas will be seller's suburbs.
Click to expand...

Hi Jake
I have heard that inner city is getting red hot, what's your opinion with regards to middle ring, will we see a ripple effect.

Interesting cos the Syd boom started in the outer cheaper suburbs of West Syd, historically starts with inner city

Cheers
MTR
 
I don't think Melbourne is moving anywhere near as hot as Sydney.

In Melbourne, the properties that are in good locations, with good bones, good positions, minimal work/headaches are quite in demand and competition is somewhat intense. But that's because good houses in a inner city area is rare.

However, the moment you're 2 blocks away in the wrong direction, have a strange floor plan etc, just over the hillside on the wrong side of the road, you won't get the same traction. Also anything priced outsde the $1.5m range just has a lot less traction. Just need to see the Roy Morgan Research ancestral house in East Melbourne. He tried tell for $10.5m, thinking it's a boom. Passed in on two bids - one at $4m, another at $6m, this weekend.

Which leads me to conclude that Melbourne is in a somewhat optimistic phase with prices trending up - and even boom conditions for some select properties - but far from the market-wide boom in Sydney.
 
Good question MTR... Clearance rates in the middle ring Eastern suburbs are high right now as well. We're seeing the big gains in larger units like villas and townhouses more so than apartments.

With that being said though as the inner apartment market keeps escalating in price one could assume that the demand would flow outward. So yes, I think there will be more momentum here throughout the near future.


It is intriguing that Sydney started with the outer suburbs. The Western side of Melbourne is still flat at the moment. It may be because of factors such as:

1. The outer west has a lot of new dwellings being constructed, keeping a lid on prices.

2. The inner west is pro-development right now and is seeing many new apartments.

3. The west as a whole tends to be made up of a lower socio-economic group. The likes of whom work in manufacturing, retail, construction and other industries which are struggling at the moment.
 
Deltaberry said:
Which leads me to conclude that Melbourne is in a somewhat optimistic phase with prices trending up - and even boom conditions for some select properties - but far from the market-wide boom in Sydney.
Click to expand...

Completely agree that Sydney has been hot for a while now and is hotter than Melbs.

The top end of the market is still soft. I've 5 clients between 2-5 million at the moment where buyer's still hold the power.
 
Yes the west is weak.

I'll tell you what's really hot. Parkville.

110sqm one storey 2 bedroom terrace sold for $1.42m. Now that's hot.
 
Jake Milne said:
Completely agree that Sydney has been hot for a while now and is hotter than Melbs.

The top end of the market is still soft. I've 5 clients between 2-5 million at the moment where buyer's still hold the power.
Click to expand...

Yes at $2m+ the market is generally in favour of buyers now, even in the inner eastern blue chip suburbs like Hawthorn/Kew where clearance rates should be highest.

In certain inner city parts, there's also good value at that price range (because most people with $2m to spend don't buy houses in places like Carlton, Fitzroy, North Melbourne etc).

If you believed the market would sustain itself (ie the recent run won't correct itself any time soon), that's where there is some serious value.
 
On ya Melbourne, go for gold son! I only wish I bought more in 11-12, oh well

That SY apartment is redic. When I saw it I spewed coffee all over my screen, and made a post about it lol

Subbed to this thread for info, Jake if you could update this every now and then that would be amazing, cheers :D
 
Last edited:
what about the far flung areas like Melton, wyndham vale and the likes , have they stopped their backward march...or still going backwards.....a little while ago, the valuations there were coming 5-10% less than what they were couple of years ago....

I wonder if the ripple effect will ever reach there...????
 
Oh yes absolutely it was a good time but that's with 20 20 vision. In 12 we bought just around 10m of properties within 1km of Melbourne Central. Most shot up exponentially since, but some are more steady though and haven't seen big jumps in bank values.

What I really regret is not looking at that Amex building on George St (I think) in Sydney. It was nearly 7% yield too.
 
Melbourne Market Heating up

I agree the Melbourne market is heating up and is likely to get hotter. However there is an exception stay away from the CBD market, Docklandland, Southbank because there are around 4000 apartments coming out of the ground.

So stay away from student accommodation, small apartments and large blocks. In my view the Melbourne city market could fall. Be away that marketing companies are being offer up to 8% to promote these properties.

Inner city is fine but look at smaller apartment blocks, new or established or townhouses.
 
Nigel Kibel said:
I agree the Melbourne market is heating up and is likely to get hotter. However there is an exception stay away from the CBD market, Docklandland, Southbank because there are around 4000 apartments coming out of the ground.

So stay away from student accommodation, small apartments and large blocks. In my view the Melbourne city market could fall. Be away that marketing companies are being offer up to 8% to promote these properties.

Inner city is fine but look at smaller apartment blocks, new or established or townhouses.
Click to expand...

+1 to this.
 
Yes I wouldn't touch apartments in Melbourne. I hear they're up a little, but it's all play money which would hardly cover your agent fees when you sell.
 
Hectic bidding and houses selling well over reserve in this part of Boroondara

29 Glyndon Road, Camberwell:

http://www.realestate.com.au/property-house-vic-camberwell-114611479

Was on market at 1.61 Million - around 4-5 bidders, sold for $1.895 M. Guess it was a developer, who will probably put up 2-3 townhouses given that it is a corner block. Will be interesting to watch what they do with the property.


http://www.realestate.com.au/property-house-vic-camberwell-114617811 -616 sqm block, 3 bedroom property on Cooloongatta Rd, sloping away from the road, bedrooms at different levels. Old, unrenovated but in good condition. Again around 4 bidders - on market at 1.2 M, sold for 1.385M to a young couple.

However, this one didn't seem to do as well (probably because of the heritage overlay?) compared to the Cooloongatta property, even though it is on a much larger, level block of 763 sqm, albeit only 2 bedrooms (can be easily extended at the back?).
http://www.realestate.com.au/property-house-vic-camberwell-114600763
3 bidders, but sold for only $1.41M. This one was much better than the property on Cooloongatta and after going to the two auctions above, thought this one would fetch at least 1.6M. Shows I don't know much about buyer psyche or the market even...lol!
 
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