A snap shot of what is happening on the ground in Melbourne

I agree with you.

I’m just focusing now on trying to find properties where you can get hold of the vendors. I havnt found any yet where I’ve been able to press too hard. But it’s coming.

 

Speaking of markets with declining stock or record lows of listings

Mornington Peninsula by johnmteliza posted 24th Oct, 2018 at 11:59 PM

Bellarine Peninsula by johnmteliza posted 24th Oct, 2018 at 11:59 PM

 

Melbourne house prices drop 4%, buyers gain upper hand

4% in 3 months. At this rate we’re looking at over 12% drops a year.

 

In a froth situation,
Price Falls initiated by credit tightening and debtCap starts from top and trickles down, hence lower segment has a lag before it gets effected by trickle down effect.

 

if a buyers borrowing power is reduced 30% overnight the market in their previously preferred areas wont self correct at the same rate leaving a longer lag. This means that those who need to buy will buy where they can and they will be cheaper areas. It wont be a boom thats for sure but with a combination of "displaced buyers" and increased activity from fhb those cheaper but good quality areas are likely to stabilise much quicker than those with the reduced buyer pools. This is already happening in some areas as vendors have adjusted prices and affordability is starting to trump the negatuve sentiment...will happen more and more if ir stay low.

 

last 4 auctions I have been to in (inner north west premium areas) I have seen a grand total of 1 bid. That place was passed in and none have sold since.

Not sure we are seeing the prices fall just yet, but the credit squeeze is taking its grip.

 

Perceived affordability from people already on the market is a reason to stabilize declines for sure. The question is - with investors out for the moment will enough new buyers enter the market as the current ones are soaked up? Less stock being added to the market while increasing levels of available stock shows we are listing more than we are selling, so the buyer pool is constrained.

Will we soon see more buyers enter the market? I don’t know.

 

To me it's clear we are just at the precipice. Reality of the market is only just filtering through to the average punter, sellers will take a long time to accept reality, which means no sales and more stock building up (as we're seeing). Further headwinds and accumulation of stock will cause more bleeding, sellers will resist, more stock -- round and round she goes.

Data just released shows melb fell 3.9% for the quarter... it is falling at an increasing rate. It's hard to see a floor before -%20 if you ask me, and could get a lot worse.

I don't think it'll get messy until Q1 2019. Potentially good value by 2020

 

Many investors who are willing.... can't,
Those Investors who can are not in hurry as time is on their side,
for them to get interested the market has to first stop falling and stabilise for at least 2/3 quarters and the price points has to make sense,
remember ability of investors to borrow further has become a rarity, Investors realise this and preserve this without wasting on any argy-bargy deals

Even the OO segment is starting to decline.

 

Will be interesting to see how The Gatwick flats on Fitzroy St St Kilda sell this weekend on The Block. This series was conceived in the highest of boom times. Still a market for quality......and location. Not sure I would live on Fitzroy St for any price but some will see it's charms I guess.

 

My experience too with the inner west property that went to auction last sat. The bottom end of the quote was market value but nobody even showed up, not even to put in an offer post auction. Now it’s listed for private sale ABOVE THE QUOTED PRICE RANGE. I struggle to imagine why someone would waltz in an pay peak price but not even attend the auction which had a 2 month campaign. Does that kind of thing often happen?

 

Seems to be standard atm in Bayside. Qoute a range that is peak pricing, auction fails, seller then switches to private sale at about 5% over the higher end of the range. Very little is selling.

Agents definitely getting desperate, calling repeatedly after open inspections. This time last year they wouldn't even call you back.

 

The investors desperate to jump in to the market are the impatient dummies that can’t even qualify for a loan (because they are dummies). The investors that do qualify because they were smart enough to establish strong cash flow and credit criteria are also smart enough to not invest in a declining market with too many indications of uncertainty.

Makes sense.

 

It is standard atm in bayside and surrounding suburbs. Most auctions are failing. The quoted prices are often in line with "market" ( peak less 5% -15% depending on what is being sold but still they are having great difficulty selling at auction. It was actually better in the late winter - spring and the last 4 -6 weeks has been a car crash.

People will not bid above top end of quoted price - if anyone even turns up at the auction at all.

Lots of auctions in last few weeks have had no shows - no one at all - attending let alone bidding.

Property then goes on above top of quoted range, as a private sale then gets reduced by 2-3%, a couple weeks later then eventually seems to sell at an "undisclosed" or "contact agent" price.

Means it's gone for less than the middle of the range IMHO.

The underquoting laws which came in last year have also meant that agents are now quoting more "realistic" evidence based market prices Ignoring any recent price falls recently, i'm not sure many vendors have caught on to this new reality and are still expecting 15% above top of the chosen range as the "standard fair result" of an auction as they were so used to prices being underquoted.

It doesn't help that the market has slid and vendors also don't want to see that.

 

I see a couple of one bedders in Footscray - old buildings, decent size - asking 300-350k. Why would someone pay that when you can get the exact same apartment in St Kilda only 10 minute walk to Fitzroy st and chapel st buzz? Footscray smells like dead fish.

Unless I’m missing something, it’s just another thing that makes no sense about this market. My concern is they are indications of a bubble. Prices aren’t set on actual value but FOMO.

 

No different in Elwood. Looked at a 1 bedder with no parking that rents for 280pw and it’s company share. Asking price is 350. Why would i pay 350k for shares in the body corporate of a building that rents to Uber drivers. Makes no sense. Only good for rich folk with money to gamble. Still doesn’t keep the Uber drivers out though.

 

A new thing in Inner east 1 million plus I have noticed is a single price with no price range. And "No" the owner will not sell it at that as per the agents

 

Stockland now attempting to sell their $700m Tarneit Estate in a trade sale. Offloading their bread and butter !!

 

I wonder if this will be the case for Melbourne: Not reliant on credit, Sydney's (very) top-end housing market shows resilience

Officially, Melbourne's bottom end is the last remaining segment to hold value. But we've been told time and time again that Melbourne follows Sydney. So my assumption was that it's only a matter of time until the affordable end of the market starts tanking hardest.

 

Went to 3 auctions this morning. Middle ring family joints. Didn’t see a bid.