Strong results and plenty of bidders as Melbourne auction market heats up

Investors and international buyers were back in the crowd at Melbourne’s auction market this weekend. Popular properties were selling hundreds of thousands of dollars above reserves and attracted several bidders.

Agents and experts reported a return of confidence across the market for the second weekend since the federal election, with a clearance rate of 64 per cent – expected to be adjusted to 60 per cent once all results are tallied.

Overall for May, Melbourne’s clearance rates have sat at an average of 56 per cent each weekend – the highest results since May last year.

Domain economist Trent Wiltshire said the results were a sign the market could be close to a turning point.

“Clearance rates are now at their highest point in a year, and other signs also point to renewed buyer interest – more people are attending open for inspections and auctions and more people are inquiring about home loans,” Mr Wiltshire said.

“Although some headwinds remain, notably a sluggish economy and tighter lending conditions, most indicators point towards Melbourne’s house price falls ending this year.”

Developers and investors were out in force at a St Kilda East auction.  The eight-bedroom property at 5 Raglan Street was rented, used mainly as a boarding house, before coming on the market in March.

It passed in at auction with a bid of $2.75 million, below the upper price guide’s of $2,915,000.

Adrian Wood, of The Agency Melbourne, said three developers were interested in buying the property, and he expected it to sell some time this week.

The large block of land could be used for up to 14 apartments or five or six townhouses, Wood said. The vendors were looking to sell up to divest their investment.

“It’s been in the family for a couple of generations,” Wood said.

Another investment property that passed in at auction was a block of apartments at 2-5/1 Grandview Grove, Prahran. The property, which included four units, had only one vendor bid of $2.1 million.

Buyers’ advocate Frank Valentic said the property had a great location, but the units were small and had minimal car parking.

“If it doesn’t have all the bells and whistles it’s not going to sell even if it’s in a great location,” Valentic said.

Not all properties passed in though, with some big results across the city.

In Camberwell, 60 Brinsley Road was one of the weekend’s biggest reported results.

The five-bedroom Federation style home sold for $3 million under the hammer, $200,000 above the expected price, with a crowd of about 120 looking on.

Fletchers Canterbury director and auctioneer Tim Heavyside said three bidders battled it out for the home, in the Camberwell Primary School zone.

“Ironically, it was a family downsizing who bought it,” Heavyside said.

Another, at 20 Silver Street Malvern, sold above the reserve by $225,000 after three bidders competed.

Selling agent Iain Carmichael, of Jellis Craig Stonnington, said a family from Hawthorn East were the winning bidders, buying the property under the hammer for $2.2 million.

“There’s no doubt there’s confidence coming back to the market,” Carmichael said.

He said another property, at 2 Bonfield Avenue, Hawthorn East, attracted Chinese buyers bidding for the two-bedroom home. It sold for $1.91 million under the hammer.

Five first-home buyers fought it out for an apartment at 1A/28 McArthur Street, Malvern which sold $78,000 above reserve.

The two-bedroom apartment was bought for $768,000 by a young woman whose father was supporting her at the auction.

“Her father joked that it was a small price to pay to get her out of the house,” Carmichael said.

Multiple bidders were also at an auction on Sunday afternoon at 14 Liscard Street, Elsternwick, which achieved the best result of the weekend. 

Three bidders battled it out, with one putting forward an an opening bid of $3.1 million. Under watch from auctioneer Grant Samuel, of Kay & Burton, competition saw the price go to $3,366,000. The property passed in before a quick negotiation saw it sold for an undisclosed price.