Melbourne auctions: First-home buyers out in force for unrenovated $731,000 South Yarra unit
A crew of first-home buyers in their 20s and 30s pushed an unrenovated two-bedroom apartment in South Yarra $111,000 above its reserve at auction on Saturday.
The apartment at 5/86 Cromwell Road attracted fierce bidding from six prospective buyers, eventually selling for $731,000 to a real estate agent in his early 30s.
It was one of 709 auctions scheduled in Melbourne on Saturday. This was the highest number of auctions scheduled since April 18 when 821 properties were due to go to auction, with only a handful of those going ahead as virtual auctions due to the sudden introduction of social distancing rules.
By evening, Domain Group recorded a preliminary clearance rate of 72.6 per cent from 552 reported results, while 83 auctions were withdrawn. Withdrawn auctions are counted as unsold properties when calculating the clearance rate.
The older-style apartment in a leafy pocket of South Yarra, just off Toorak Road and a short walk to Chapel Street, last sold in 1985 for $72,000 and was purchased as an investment.
Auctioneer Peter Kakos, general manager of The Agency in Victoria, said the apartment had been for lease for several weeks before it was listed for sale in late October.
“We had very few people look at it when it was for lease,” he said. “But as soon as it was on the market for sale, we had an incredible amount of interest.”
The post-lockdown market looks attractive for first-home buyers, he said, due to low interest rates and the announcement this week that the Victorian Government will waive 25 per cent of stamp duty on existing homes, and up to 50 per cent on new homes worth up to $1 million.
Bidding for the spacious first-floor apartment, which also boasts off-street parking, began at $600,000 – at the lower end of the guided price range of $600,000 to $640,000.
Six parties initially fought it out, with three bidders left in the running once it tipped $700,000. It eventually sold to the young real estate agent, who has been looking to secure his first home, with some help from his dad, for the past 12 months.
The underbidders were also first-home buyers, including a young couple and another young man, accompanied by his parents.
Mr Kakos said Melbourne’s extended lockdown had given Millennials a chance to save.
“COVID has actually been very kind to young renters because they haven’t been out buying $15 beers and $40 steaks. They’ve been at home saving their money instead,” he said.
“What we’re seeing is that these first-home buyers just don’t want to rent anymore. And I think what’s happening is that they’re realising that, on the back of COVID, they’re probably not going to get the price drops and the bargains they thought they might get. So instead of waiting until next year, they’re keen to get in now before things really take off again.”
The home had drawn interest from a couple of investors, but it was first-home buyers who have had a chance to save that drove the result, he said.
In Kensington, a large work-from-home warehouse conversion set on 332 square metres, with secure car parking for up to five cars, passed in at auction but sold after for $2,040,000.
The unique four-bedroom, three-bathroom property at 12 Scarborough Place, boasts a large downstairs showroom, which is currently home to an impressive and ever-growing vintage car collection.
“The vendor is seeking a tree change to Macedon where there is more room for his cars and his children,” listing agent Jayson Watts from Nelson Alexander Flemington said.
With a price guide of $1,875,000 to $2,050,000, the property was initially passed in at auction, but later sold to an owner-occupier, who placed the highest and only bid.
“He plans to run a fitness studio out of the workshop and live upstairs,” Mr Watts said. “So he’s pretty excited.
“This is a pretty unique property and in the lead-up to today we had two other very interested parties who were attracted to the size of this,” he added.
“If COVID has taught me one thing it’s that people really value space in their home and this certainly has that.”
Over in Clifton Hill, a young couple seeking to upsize to a larger home in the inner city outbid another interested party, to secure a four-bedroom, two-bathroom period home for $2.51 million.
With a price guide of $2.3 to $2.5 million, the auction got underway with a vendor bid of $2.3 million.
Despite having four registered bidders, just two parties made a play for the renovated, two-storey terrace at 76 Berry Street.
“It was a very competitive auction, with the bids going up in increments of $20,000, up to $2.48 million, and then up in $10,000 increments from there,” listing agent Peter Stephens from Nelson Alexander Fitzroy said.
“It was on the market at $2.5 million and sold for $2.51 million.”
He said the vendors, who had lived in the home for 24 years, were making a sea change to Mornington to be closer to their children and grandchildren.
“I think there have been quite a few people who have been considering a bit of a sea change or a tree change and COVID has just brought that forward for a lot of people,” Mr Stephens said.
A Tullamarine family seeking a post-COVID tree change of their own were thrilled to sell their four-bedroom home at auction for $83,000 above the reserve.
Seven of the eight registered bidders were active during the competitive auction, with an opening bid of $630,000, for the family home at 25 Dianne Drive.
“The buyers were competitive and kept the auction moving along quickly, they didn’t give way and it just shot up to the sale price of $723,000,” said listing agent Phillip Mercieca from Ray White Gladstone Park.
“It’s an outstanding result for that size home in the area. The sale price today probably would have exceeded the price for a comparable home sold pre-COVID this year by about 10 per cent.”
He said the buyers were an older couple looking to downsize who sold their home a year ago and have been looking since before COVID.
“Like the majority of buyers, they expected the market to crash and prices to drop but have realised that the market has stayed steady over the year and even gotten stronger.”
Vendor Ann-Marie Allen said the strong result would allow them to purchase a bigger home on a larger property further out of the city.
“We’ve got a growing family so we’re looking out past Sunbury and around Gisborne for something with a bit more space and even possibly a pool,” she said.
“Today’s result allows us to really start looking for something out that way with a bit more confidence.”
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