Melbourne buyers forced to increase budgets as hot properties become even hotter
Cottage sale attracts bidders
A good sized crowd turned out for the auction of this beautiful home. Check out excerpts from Domain’s live auction coverage.
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Buyers had little choice but to hike up their budgets at many Melbourne auctions at the weekend as sought-after property types soared to new price levels.
On Saturday, a one-bedroom art-deco flat in Elwood sold at auction for a remarkable $820,000. In other suburbs, several extended single-fronted cottages broke through the $2 million barrier, something that would have been unheard of only six months ago.
There was some patchiness in the market and buyer resistance to paying reserves perceived as too high, but mid-market family homes auctioned at the weekend tended to achieve above-market prices.
133 Head Street, Brighton sold for $2,905,000 on Saturday. Photo: Supplied
The Domain Group posted another upbeat clearance rate of 80.6 per cent from 952 reported auctions. Real estate agents did not report results for a further 222 auctions held on Saturday.
The weekend result was slightly down on last weekend’s 82.4 clearance rate from record-high volumes. Several agents said this weekend’s market was not as strong as last weekend’s.
Nelson Alexander sales director Arch Staver said some properties that in recent weeks would have attracted four bidders, were now pulling two.
6/49 Broadway Elwood sold for $820,000 on Saturday. Photo: Supplied
“Properties are still selling for good prices, but the competition seems to be focused on the same houses,” he said. “People are pushing them aggressively, but there are a handful of properties that are slipping under the radar and presenting buyers with good opportunities.”
Other agents said the momentum from last weekend’s super Saturday held up.
Marshall White, which specialises in $1 million to $5 million sales, said it averaged 3.75 bidders per auction over the past two weekends.
6 Cambridge Street Armadale sold for $2.71 million on Saturday. Photo: Supplied
Director John Bongiorno said the company’s 54 auctions on Saturday drew between two and eight bidders “for some extraordinary results”.
Marshall White fielded offers from four families at the sale of 133 Head Street, Brighton.
The four-bedroom federation house with a pool scored an opening bid of $2.2 million. Auctioneer Andrew Hayne declared the property on the market at $2,675,000 before selling it to a young family for $2,905,000.
18 Cambridge Street Armadale sold for $1.87 million on Saturday. Photo: Supplied.
Families trying to upsize to larger homes were a stand-out presence in the market at the weekend, especially in the $1 million to $2 million price band.
In Armadale, two single-fronted period houses were up for grabs in the same street.
Wakelin Property Advisory director Paul Nugent said the differing standards of renovation of the two homes showed up the big premiums that buyers were prepared to pay for substantially extended heritage properties.
The first cottage to go under the hammer, at 28 Cambridge Street, Armadale, was knocked down by Hodges for $1.87 million.
Mr Nugent said the well-presented and “perfectly liveable” three-bedroom property was on the market at $1.72 million with five bidders competing.
But the big money was splashed out down the road at 6 Cambridge Street. This house, with the same rear northerly aspect and the same land size of 211 square metres, has a first-floor extension. There are four bedrooms and two bathrooms.
The weatherboard home drew three bidders when offered by Thomson Real Estate. It sold for $2.71 million, some $840,000 more than its stable mate.
Carlton North is also seeing $2 million-plus sales of cottages, something that previously occurred only in ultra-high-status precincts such as East Melbourne.
One of the weekend’s strongest results was for 6/49 Broadway, Elwood. The first-floor, one-bedroom apartment has a study, a large roof terrace and a lock-up garage.
Mr Nugent said four bidders targeted the 1936-built flat in the iconic P&O-style “Windermere” block. On the market at $755,000, it was knocked down by Chisholm & Gamon for $820,000.
Mr Nugent noted that many buyers had to increase budgets by 10 per cent to get what they wanted.
“We are getting into that uncomfortable zone,” he said. “Logically, you think you should pay between X and Y, but you need to extend yourself beyond the Y parameter at the moment.”