Investors beat out home buyers at hard-fought auction in Fitzroy

A pair of investors walked away with the keys to a popular three-bedroom townhouse in a Fitzroy unit block on Saturday, fending off several home buyers at auction.

The home at 5/26 Victoria Street was hotly contested at auction, due to its position near the bustling Brunswick Street precinct, yet relatively peaceful setting.

Its location off main roads and inside a 43-unit complex drew six bidders to the auction, Nelson Alexander agent David Sanguinedo said.

Bidding opened at $820,000 and quickly climbed to $890,000, which was above the quoted price range of $800,000 to $880,000. Auctioneer Arch Staver announced the home on the market after the next bid of $900,000.

A brief shower of rain did not slow the auction, sprinkling the bidders and gathered crowd as increments slipped to $2500 and then $1000. It sold to the investors for $985,000.

Mr Sanguinedo said he had not expected an investor would be the ultimate winner. “It did surprise me, investors have been starting to come back into the market in the last couple of weeks, which we’re very happy about,” he said.

The townhouse last sold in March 2002 for $400,000. Mr Sanguinedo said the buyers were most keen on its capital growth potential.

“I think it was a good price… I think the investors saw the value in the capital growth,” he said.

It was one of 589 auctions held on Saturday in Melbourne.

By evening, Domain Group had recorded a 60.7 per cent clearance rate from 353 reported results.

Later in Albert Park, a two-bedroom terrace currently owned by an investor, passed in on one bid.

The single-fronted home at 32 Little Page Street, with a mezzanine level, had well-attended opens and was popular for its style and sub-million-dollar price point.

The mezzanine level was added by a previous owner and was the home’s second bedroom.

Bidding opened at the bottom of the quoted price range of $900,000 to $990,000.

A home-buyer was the sole bidder, placing a bid of $905,000 for the right to negotiate with the vendor at their reserve of $990,000. The home was yet to sell by time of publication.

Following the brief auction, several potential buyers waited outside the home hoping negotiations would fall through.

Hockingstuart auctioneer David Wood said buyers were still wary, despite results like the competitive Fitzroy auction earlier in the day becoming more common.

“Often people might not have their ducks in a row when it comes to finances [so they can bid] on the day, but buyers are there,” he said. “And it’s a matter of finding their level of price when it comes to making deals happen.

“Buyers are looking at everything, but they have a fear of paying too much.”

Earlier in South Melbourne, a similar situation played out over a two-bedroom house.

The dual level property at 218 Pickles Street passed in at $805,000, but managed to sell soon after for $850,000. The home had a quoted price range of $775,000 to $850,000.

“We had two bidders, and some more interest after the auction,” The Agency’s Michael Paproth said.

The buyer was an owner-occupier moving from the city’s fringes.

“It’s a nice sub-million-dollar opportunity and close to South Melbourne Market and Bay Street, it was nice and affordable,” Mr Paproth said. “They’re an owner-occupier from the outer suburbs looking to come in and live the inner city lifestyle.”

Mr Paproth warned buyers that not bidding would backfire more often in the coming months.

“This market is turning,” he said. “In the next few weeks we’ll have an election and there’s an interest rate cut coming up so this market will turn very quickly.”

Later in South Yarra a deceased estate smashed its reserve by $125,000 at auction.

Four bidders battled it out for the two-bedroom home on 178 square metres of land, beginning at $1.6 million and soaring all the way to $1,925,000.

Jellis Craig auctioneer Andrew Macmillan said 66 Domain Street’s location was the key factor, as the home had fallen into disrepair.

“It was a great spot in the botanic precinct. The house was in original condition, it’s an early Victorian cottage,” he said.