Gen Y buyers swoop on trendy apartments and affordable houses across Melbourne

Buyers under the age of 30 were among the most energetic purchasers of residential real estate across Melbourne’s suburbs on Saturday as property investors held fire.

First-home buyers snapped up sub-$600,000 apartments at auctions in such areas as St Kilda and Hawthorn, and swooped on affordable houses in Werribee, Boronia and Craigieburn.

The stepped-up buying by Millennials lifted the Melbourne weekend auction clearance rate to 57.8 per cent from 602 reported auctions. The auction disposal rate was well up on the previous weekend’s 53.6 per cent; revised to 49.9 per cent after counting “straggler” results.

In Werribee on Saturday, two bidders tried to purchase a new four-bedroom home at 58 Powlett Street, quoted at $430,000 to $460,000. The semi-detached house with a two-car garage was passed in to a young woman for $455,000. Soon after, she sealed the deal with an offer of $465,000.

Hocking Stuart auctioneer Samantha McCarthy said the first-home buyer had missed out on other auctioned homes over the past four months: “It was great to see her secure one.”

More confident auction bidding by young people, encouraged by Victorian government first-home buyer incentives, is helping to build an orderly housing market. When the owners of entry-level homes believe they can get a good price for an existing property and trade up to better or larger accommodation, it frees up housing stock and boosts the buyer pool for higher-priced properties.

Barry Plant auctioneer James Hatzimoisis sold six from six affordably priced homes at auctions in Taylors Lakes. “First-home buyers are certainly out and about and actively looking at open for inspections and upcoming auctions,” he said.

Assertive buyers in their 20s were also in plentiful supply at the auction of a north-facing, 1970s unit at 4/30 Elm Street, Hawthorn.

Auctioneer George Bushby, from Jellis Craig, told a crowd of 20 onlookers the unit’s owner had one request – to get a sold sticker on the board.

The message seemed to rev up the would-be buyers. Three 20-something bidders – two with parents by their side – placed bids. After an opening vendor bid of $500,000, bids in $10,000 and $5000 increments came fairly quickly.

The two-bedroom unit, one of nine in the block, was declared “selling” at $560,000 and was knocked down for $588,500 to a baseball-cap-clad man who had his girlfriend and mother in tow.

First-home buyers pay no stamp duty on properties below $600,000. They also get stamp duty reductions for purchases below $750,000.

Australian Bureau of Statistics figures released on Wednesday showed that lending to first-home buyers – before seasonal adjustments – rose to 18.1 per cent of national home loan commitments, even as the number of new first-time buyer loans dropped to 9541 from 10,303 in May.

But investor home loans fell to their lowest level in nearly five years in June as investors retreated from the housing market. ABS data shows investors accounted for almost 50 per cent of all residential buying activity in 2014 but now account for less than one-third of the market.

In this climate, first-time buyers are in pole position to purchase properties below $750,000 with reduced competition from investors.

There were signs on Saturday of younger buyers being picky and tightening their purse strings.

The property advisory operation Advantage Property Consulting represented the vendor of a renovated two-bedroom unit that went to auction at 12/10-12 Ida Street, Fitzroy North.

Advantage managing director Frank Valentic expected several first-home buyers to compete for the apartment. But only one of those present made a bid, and the property was passed in for $564,500, against a reserve of $590,000.

Mr Valentic said freshly-painted budget properties that had been styled with rented furniture were selling for up to 10 per cent more than comparable unstyled properties.

He believes younger buyers can snag a bargain if they target tenanted – and often cluttered – properties and those with older kitchens and bathrooms: “Many younger people don’t like looking at these properties because most first-home buyers don’t have the extra money to renovate.”

There were mixed results for higher priced homes offered at the weekend.

Observers said period cottages in the inner-city often struggled to attract more than one bidder but achieved post-auction negotiated results that were in line with or close to the vendor’s asking price.

Other buyers swooped on homes that were priced near or below the median price of a sought-after suburb.

In Canterbury, Kay & Burton’s Scott Patterson fielded five bidders at the auction of an English-style, inter-war villa on 757 square metres. The three-bedroom home sold for $1.91 million, about $100,000 above the reserve.

Melbourne’s top priced sale reported on the weekend was for a Victorian-era house on 847 square metres at 12 Derby Street, Camberwell. The property, near Camberwell Junction, made $3.8 million through Jellis Craig.