Higher-end vendors holding fire

Agent and auctioneer Bill Karp of Barry Plant looks for a bid at the auction of an Essendon home on Saturday. Photo: SuppliedMore than 700 properties were auctioned on Saturday but prospective sellers of mid- to high-priced homes in Melbourne’s inner-east and key bayside suburbs largely held fire.
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Only 70 inner-east properties went under the hammer, a lower-than-normal listing ratio that indicates many $1.5 million-plus vendors – and buyers – are holding off until spring.

Real estate agents say the bayside and southern suburbs are also seeing an “unseasonably low” level of winter listings.

The Domain Group posted a clearance rate that continued the trend of below 80 per cent through winter, clocking in at 76 per cent from 557 auctions. There were 178 unreported results.

Tap here for Saturday’s auction results.

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Melbourne recorded five consecutive weekends with auction clearance rates below 80 per cent. This followed 10 weekends through April, May and into June when clearances spiked up above 80 per cent.

Some agents expect a moderating influence on prices as listing volumes surge in August and September.

“I think the market, price-wise, has had its run,” Greg Hocking, of the nine-office Greg Hocking Real Estate, said on Saturday.

“There are still spot fires going off here and there but the real push in general price rises is not sustainable – not in the next period because we’re going to get a bump-up in volume.”

Hocking said price growth had been high, “if not surging” in bayside areas but this would change as more supply came on.

It’s difficult to get a firm reading on what the likely state of play will be for the spring market until more high-quality homes are listed for sale in September.

Domain Group senior economist Dr Andrew Wilson said in recent weeks that clearance rates had slipped in the inner-city and St Kilda.

“There has been an improvement in the west and the north, amid signs of a solid revival in the local economy,” he said.

“That’s part of the equation now, particularly with the building boom in the city, which is providing jobs for people in the western and northern suburbs.”

The Domain House Price Report, released last week, shows how the Melbourne market has defied expectations this year.

In the three months to June 30, house prices grew 3.5 per cent to a median of $668,030.

This brings the total growth for 2014-15 year to 10.3 per cent, or more than $62,000.

The report says the latest quarterly rise is the strongest result since December 2013 and coincides with Sydney’s median house price reaching $1 million after shooting up 8.4 per cent.

James Buyer Advocates principal Mal James said the market in September was often unusually strong because buyers had come in after a winter lull. It would take about six weeks to identify any change trends, he added.

Both James and Michael Ramsay, of The Advocates, believe Melbourne property is now firmly an international buying market.

Ramsay said the extent of overseas buying of $2 million to $10 million properties hadn’t been affected by new state and federal government restrictions and charges for international buyers.

“The way the market is travelling is unsustainable for any length of time, such as for another five years,” Ramsay said.

“But I can’t see that the market is going to slow down significantly because of the amount of people coming into the state and the amount of wealth that seems to be still out there.”

Yet obtaining approval to borrow funds isn’t getting any easier. Last week, the ANZ and Commonwealth banks both increased interest rates for housing investors by 0.27 percentage points in a bid to limit borrowing by landlord buyers.

Property advisers and mortgage brokers also say lenders are becoming more conservative in valuing the properties they advance loans on.

Broker Ashley Playsted​, of Wealthie​, said the stricter valuations were mainly affecting apartment buyers.

Low interest rates continue to be the big drawcard for all kinds of buyers. Playsted said high-net-worth buyers rarely paid cash and were just as motivated by low-rate deals as other borrowers.

“They are concerned about getting the right loan product at the right rate but are less concerned about rates going up by half a per cent because their financial position gives them a greater degree of immunity,” he said.

There are 623 auctions scheduled for next weekend. Domain