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“Sell in early spring, buy in late spring” is the advice given to home hunters by many Melbourne real estate agents – and it has proved utterly correct this year.

As the curtain falls on the 2014 residential property market, it’s clear that Melburnians who opted to sell houses and apartments in September have done better than vendors who sold after mid-October.

Of course, A-grade properties in superior streets almost always attract competition and strong prices regardless of the time of year they are marketed. But “me-too” properties that are similar to the house or unit across the road, performed at higher levels in the first weeks of spring.

On September 14, the Domain Group reported an auction clearance rate of 77 per cent (from 667 auctioned properties). On the next weekend a clearance rate of 78 per cent was reported (from 755 reported auctions), while on the AFL Grand Final weekend on September 28, when fewer than 100 auctions were held, the clearance rate climbed to 84 per cent.

Clearance rates held up at around 76 per cent in the first half of October, but tracked down in November. There were clearances of 67 per cent on November 30 (from 926 auctioned properties), 70 per cent on December 6 (from 1063 properties) and 71 per cent on December 13 (from 1003 auctions).

What’s the takeout message from this? Clearly, it’s a smart move for upgraders and downsizers to sell in the first three weeks of September. They should go for a long settlement, and buy between October and December. This is when stock levels surge and vendors become anxious to seal a deal.

There are other good times to sell property. The winter auction market was very strong this year. Changeover buyers, intending to buy and sell next spring, should look at the pros and cons of selling in June, July or August.

Likewise, home owners planning a move in April or May of 2015 may get a stronger price by selling in the second half of February. There is always a bit of pep in February’s residential market – a lot of buyers search for properties at this time. After all, the market has been in in lock-down mode since December.

The auction market was strong and steady this year. Even so, house buyers purchasing in the most popular price brackets have applied pressure to vendors and have had room to move. They’ve been able to walk away from properties seen as over-priced and to peg back prices growth.

Some agents in the inner suburbs have said they are “not happy” with the prices achieved for houses in the $1 million to $1.8 million range in 2014. This is the best-supplied segment of the inner Melbourne house market – and the most competitive.

Similarly, agents in the middle-ring suburbs have seen plentiful stock and some downward pressure on prices for houses quoted between $600,000 and $800,000.

The 2014 market kicked off 11 months ago with the Reserve Bank giving a clear sign it planned to keep interest rates on hold. RBA governor Glenn Stevens said at the time “the most prudent course is likely to be a period of stability in interest rates.”

The stable rates scene worked to motivate prospective vendors who had been holding back from listing because they expected rates to fall further. This helped to increase the number of residential property transactions in 2014, with sales activity in Melbourne lifting modestly compared to 2012 and 2013.

Now that economists and some RBA officials are canvassing further rate cuts in the first half of 2015, next year’s market promises to be an exciting ride.


Posted by Chris Tolhurst – The Age on 19th December, 2014