Herron Todd White’s summary on the Melbourne residential market.
– The overall Melbourne residential market has steadily increased over the first half of 2014.
– Auction numbers have been high with nearly 3,000 auctions held in April 2014, higher than the historic ten year average of 2,510 for April, while March was a record- breaking month in terms of auctions with 4,750.
– A further 3,700 auctions are scheduled for May pointing to market optimism amongst vendors.
– Clearance rates so far in May have been steady averaging 70%, which is an increase from 68% in April which endured both the Anzac Day and Easter long weekends, and also marks a return to similar levels recorded in March and February with 71% and 70% respectively.
– Stable clearance rates have reinforced the good demand in the overall market with the median house price growing at 5.4% on average across metropolitan Melbourne during the first four months of 2014.
– A high volume of sales transactions have been recorded in the $500,000 to $800,000 price point, especially in suburbs such as Bentleigh East in the middle south-east, Thornbury in the middle north, and Yarraville in the inner west.
– While optimism and demand have remained quite stable in the overall market both buyers and sellers should remain cautious of the apartment- dominated markets of Melbourne CBD, Docklands, and Southbank.
– While the housing market has seen an overall 5.4% increase in prices, the apartment market has experienced just a 0.9% increase in 2014.
– The alarm bells are highlighted by Docklands recording a 43% clearance rate from only seven auctions in 2014, with a further 370 properties currently on the market by private sale.
– Between 2009 and 2013 off the plan apartment releases in the CBD increased by a staggering 103% from 7,000 to more than 14,000, in the same time first home buyers have gradually left the market with Melbourne currently experiencing its lowest number of first home buyers in 23 years.
– However, sales recorded over the three months to May 2014 have totalled $510.9 million, an increase from the $126.8 million recorded to February 2014 and also an increase on the $166.8 million recorded to November 2013.
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