Prospective buyers in Melbourne are aggressively targeting A-grade houses in low-supply suburbs despite a high volume of listings. Last weekend, Melbourne posted a clearance rate of 72 per cent from 780 reported auctions. Buyers competed for renovated properties and those with extension or redevelopment potential.
An example of this is Reservoir. Located 12 kilometres north of the CBD, Reservoir hosted 13 auctions last Saturday, making it a top auction location. It is now considered an up and coming location, finally ridding itself of its working class reputation.
“It is getting a lot of spillover from Brunswick and Northcote types, who can’t afford to buy there but are seeing better value in the likes of Reservoir and Preston. You can buy very well in Reservoir for $700,000 to $800,000,” said Miriam Sandkuhler of Property Mavens.
According to Arch Staver, sales director at Nelson Alexander, factors such as the federal election, the Brexit referendum, and the recent falls on the Australian share market failed to hold back buyers, thanks to the low supply of quality properties in the north.
“There are so many reasons for people to not be bidding aggressively yet, interestingly, they are,” Staver said. “Buyers are having a red-hot go, and when you have three or four bidders at any given auction, it means there are not enough properties available to satisfy demand.”
Domain Group chief economist Andrew Wilson said that buyers are flocking the city’s north, west, and southeast regions due to good-value buying. Some factors that intensify the bidding wars include a ‘whatever it takes’ attitude from buyers, lower borrowing costs, and fewer listings of quality properties. Owner-occupiers are also beating investors in buying entry-level houses between $700,000 and $1.2 million.
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