Since restrictions were eased across the state, there’s no denying that the Victorian real estate market has roared back to life, and in some pockets of the state, the market is absolutely soaring.
While CoreLogic reported that Melbourne values overall declined a mild -0.2 per cent over October, it’s worth noting that this was the smallest month-on-month drop since April. In regional Victoria, property prices continued on an upward trajectory, posting growth of +0.5 per cent,
Given capital cities around the country are now in a period of recovery, experts expect that Melbourne will soon follow-suit, and that the worst of the downturn is over.
And it sure is looking that way; auction activity has been going from strength-to-strength, with listings, clearance rates and scheduled auctions on the rise… in some regions, properties are achieving prices well beyond vendor expectations.
We take a look at some of these properties to find out why they’re achieving such amazing results.
Solid presentation and strong buyer demand results in Croydon home selling for top price
Paul Fenech, Principal of McGrath Croydon sold a beautiful four-bedroom home in Melbourne’s north east for $864,000.
According to Mr Fenech, the home on a large 860 square metre block was a hit with buyers.
“We were initially expecting around $800k to $810k, but we had six offers, ranging from $770k up to $860k-odd.
“25 to 30 groups came through the property over a week and a half, and we ended up selling it for $864k,” he said.
According to Mr Fenech, staging the home made a huge difference to the property, and the lack of listings in the area almost certainly contributed to the fierce competition between buyers.
“It was just one of those homes… It was on a full block of land, which people liked, and there wasn’t a good deal of other properties on the market at the time, so buyers jumped on it straight away,” he said.
Mr Fenech says getting around three buyers offering under the asking price, and three offering over was a good situation for the vendor to be in and helped to drive the sale to an excellent result.
“The vendor was over the moon,” he said.
Mr Fenech is optimistic about 2021, but given that Melbourne has just come out of a second wave, he speaks with a slight tone of caution.
“It’s hard to know with covid, but certainly, everything seems to be going really well at the moment in Victoria, especially after a long time of it not being okay.
“At the moment, if you’ve got a good listing that’s well-priced, it’s certainly going to sell very well, and we’ve had people after Covid realising they want a bit of land, so that’s been a good thing for our area.
“I think as long as interest rates stay low, which they are going to be for two to three years, we should be good,” he says.
Mr Fenech is referring to the latest Reserve Bank interest rate cut to a new low of 0.1 per cent, which is the lowest interest rate in history, ensuring increased borrowing willingness and capacity for buyers.
The Reserve Bank has stated that this rate is expected to stay in place for at least three years.
In addition, proposed changes to lending obligations are expected to be rolled-out in March 2021, which will make credit more accessible to Australians.
Mr Fenech is expecting a busy few months ahead.
“I think it’s going to be busy; with great weather, daylight savings and low interest rates, there’s no reason why it shouldn’t be good. We’re quite comfortable with that - so fingers crossed it keeps going,” he said.
Demand for properties on Mornington Peninsula soars
According to James Merchan, Director and Principal of Impact Realty Group, demand for properties on the Mornington Peninsula has accelerated since Covid.
“For the last few years, we’ve seen a push from the Bayside area and Eastern Suburbs [of Melbourne] coming down to Mount Eliza for lifestyle properties.
“In Bayside pockets like Bentley, Beaumaris and Mentone, what’s actually happening is those areas are getting developed out and people are selling and then coming to Mount Eliza in search of a better lifestyle.
“We’ve seen that trend for the last three or four years, and since Covid hit, the amount of buyers coming from outer areas and even inner-city corridors has just amplified the demand on the Peninsula.
Mr Merchan says two of the biggest drivers for this shift are changing working conditions and the greater lifestyle that the region has on offer.
“For those who have typically lived closer to the city, now they’ve got the flexibility to work from home two or three days a week, so now they’re saying, ‘we need a bigger home, because we’re working from home’ and they don’t necessarily need to live close to the city anymore.
“In Mornington, Mount Eliza, Frankston and Mount Martha, buyers can see that they get great value for money,” he said.
Data from the Australian Bureau of Statistics supports this, with the latest internal migration data showing that almost 6,000 people left Melbourne for a new life in regional Victoria in the three months to June 2020, which is double the numbers seen in the previous quarter.
Time will tell if the next quarter will show a continuation of this trend.
Over the past few months, Mr Merchan has seen the market gaining plenty of momentum. He recently sold a sprawling five-bedroom property, complete with tennis court and inground pool, for $2.5 million.
The property was situated on Kirkstall Close in Frankston South, one of the suburb’s best streets. It was a fantastic result that smashed the street’s previous record.
Another property at 22 Quinns Parade recently sold to an out of area buyer for $1.225 million, significantly higher than what this same property would have sold for pre-Covid.
The property garnered plenty of interest, with Mr Merchan guiding 40 buyers through the home and receiving three offers.
It’s a similar narrative for many other properties sold by Impact Realty, with 416 Canadian Bay Road attracting 50 house hunters over three days and four offers.
Similarly, 64 Summerhill Road in Mount Eliza was popular with buyers, with Mr Merchan taking multiple groups through the home and eventually selling it for $1.105 million.
“It was a fully-renovated three-bedroom home; we launched on a Sunday, took 25 buyers through the property within three days and had four offers.
Economists and industry experts are expecting strong activity in the market to continue. Managing Director of SQM Research Louis Christopher recently went on the record, telling the Sydney Morning Herald that from a national perspective, “the darker scenario of a house price crash has now been averted.”
If these results are anything to go by, we have to say we agree.