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PPG_Blog_July_Market update

The Melbourne residential property market remains firm this week despite the predictable winter downturn in stock and the wretched wet weather. An Elsternwick property fetched the highest house price of just over $2.1 million whilst in Balwyn North an apartment sold for the top price – a cool $1.255 million.

A clearance rate of 59% was recorded at auctions over the 30 June weekend compared to 55% the weekend before and 53% for the same weekend last year. There were 424 auctions reported to the Real Estate Institute of Victoria with 252 selling and 172 being passed in, 121 of those on a vendors bid. The highest clearance rates prior to the 30 June weekend have been recorded in Hampton East, Kew East, Mulgrave, Ashburton and Fitzroy North. Demand has been stimulated in these suburbs by prices being generally below their peak in late 2010. Next weekend the REIV expects around 400 auctions.

The clearance rate has been hovering around the 55-60% mark for most of 2012 indicating a more balanced year of real estate transactions. The graph below compares clearance rates from 2011 with the clearance rates achieved this year so far. (The clearance rate is calculated by dividing the total number of properties sold before, sold at auction and sold after by the number of reported auctions.)

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Market activity appears to be slightly better than last year although this unsubstantial growth reflects both an easing in population increases and an improvement in the supply of new homes. And until the prevailing economic climate improves, the market is predicted to remain steady and relatively unchanged.

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