VIC 20% price crash? Might have happened in Melbourne.

i wouldn't call that a crash... comparing a semi-detached weatherboard 2x1 with a 3x1 and a fully detached character brick home, IMO price variations seem fair and even within reasonable range of skilled auctioneer could achieve.

what does seem clear though is that demand is likely slowing for that kind of product.. IMO only suited to someone seeking a low yield rental, or a downsizer couple who dont drive.

Compare to say Lalor...

5 King Street, Lalor, Vic 3075 - Property Details

430k in December last year and i wouldn't be surprised if it fetched 600k now. Taking an average test of the market, sentiment is still high. People still believe in property in Melbourne. I'm waiting for people to hate it, for the over-stretched people to regret signing the bottom line. When that negative sentiment hits, that's when the true bargains appear.

 

There is a research in sky news-property channel the other week that on average by having another bathroom will increase the value by $300k. That figure is for Syd houses in the inner suburbs, I can’t remember the figures for Melb.
The research provide comparison between properties having 1 or 2 bathroom, any additional bathroom from 2 onwards will not add significant value .

 

To be honest 20% variance is not that extreme. Often going to Auctions I see houses selling for +10% or -10% from my predicted price just depending on the day. Factors lke how desperate to sell (if it is an estate sale which split between multiple people often it gets put on market pretty early). In the current market the >+10% ones only usually need 2 families to fight over a PPOR they both want. Blocks of land to develop have less variance as all builders do roughly the same calculations in this current market in Melbourne

 

Thanks for sharing.

Eventually the Melb market will correct same as Syd, but why would anyone buy straight after a correction, makes no sense.

Look at historical data on boom/bust cycles some will last for 7 years, much longer time frame than boom cycles. In effect its like catching a falling knife.

If anyone is looking for a bargain just wait and sit back you have plenty of time once markets correct.

MTR

Look at

 

Am I missing something? Its not the same house.

 

Let's compare apples with apples, same house, same condition, auctioned 16 months apart,16% increase.

55 Mckinnon Road, Mckinnon, Vic 3204 - View Sold History & Research Property Values - realestate.com.au

$1,830,000 SOLD Aug 2017

$1,582,000 SOLD Apr 2016

 

The Belgrave St one has one extra bathroom, laundry room and separate living and dining area. Also the third bedroom of the William St one is too small, I would call it a study rather than an proper bedroom.

With the above consideration I think 300k different is sort of reasonable, I think the extra bathroom alone is worth 100k, the 46 sqm land worth another 100k, and the rest goes to the last 100k.

 

It is actually $380k and for inner suburb units in Sydney! Melbourne not far behind..

Unbelievable stuff

Sydney:
Staggering cost of extra bathroom

Melb:
No Cookies | The Weekly Times

 

Also look at the difference in the third bedroom - it's pretty small in 25 William

To give some context on how these 2 bed plus one teeny tiny bedrooms sell, here's one in Toorak from earlier this year
16 Tashinny Road, Toorak, vic - Property Sold Price

Makes the Hawthorn one look overpriced given the delta between the two suburbs