VIC Melbourne market is hot 2021

{Note from mods - this thread continues from here: Melbourne market is hot}




Do you have any idea when the house stock will increase? Looking at Mitcham, the stock level is alarming

 

Today first day that had a few auctions that I am sure just couldn't sneak in before Christmas. A few observations first


1. https://www.realestate.com.au/property-house-vic-surrey+hills-135057566
probably passed in bought in 2016 for 1.6M,, lay out is challenged with no garage parking and being off a main rd, no surprises there as vendor probably chasing 2 mil

2. https://www.realestate.com.au/sold/property-apartment-vic-surrey+hills-135161842
610K solid result for a renovated 2nd floor apartment, with a rental of around $370 not a great yeild though. A big stairs so definitely not for downsizers

3. https://www.realestate.com.au/sold/property-house-vic-box+hill+south-135071846
2.71M for a new house (a volume builder) but quite nice layout. Result is a bit weak, possibly the Chinese money not really there, Could have pushed closer to

4.https://www.realestate.com.au/sold/property-townhouse-vic-surrey+hills-135243646
sold 920K and on the market at 910K with 2 bidders, on paper looks good but needs a decent reno and bones are not great, good place for someone who DIY as they go. Single level and 2 on a block (fair price)

5. https://www.realestate.com.au/property-house-vic-balwyn-135188938
solid price of 2.1M at close to 3.4K per m which is quite good for the area. The wide frontage helps to do a decent build.

I feel the market that I am looking at is similarly vibe/price to mid 2019 before it got more frantic before COVID. Just like those times before there seems to less panic and people are not stretching themselves like in 2016, 2017 and end of 2019 on B graders or worse.. Property on the market and a couple more bids then knocked down as opposed to those long drawn out ones

None of the above properties were A graders with layout and location so I am sure if an A grader came along there would be fireworks. Definitely an owner occupier market, downsizer market is not really there but more the young and aspirational moving into 10km East of CBD.

Don't blame the downsizers as better move closer to the water and being around the schools doesn't do much for them (I am sure the grandkids will visit them if they live on the Peninsula)

Renovated/New Turn key properties are the go as doing a reno unless you enjoy it or you need to save money and can do yourself is going the way of the drive thru

 

Noticing a lot more positive stories in the media about the Melbourne market:

'Like King Street on a Saturday night': Melbourne buyers in inspection frenzy

 

The unit market is hot for owner occupier stock, lots of firstys are out and about.

this one sold for $731k with a massive crowd, 3 strong bidders

https://m.realestate.com.au/property-apartment-vic-hawthorn-135319146

 

6/10 Clyde Street, Surrey Hills VIC 3127 | Domain

655K really strong result, with the 50% stamp duty waiver for under 1 mil and SMSF lending being easier, the older stuff is proving a hit but gross yields are getting below 3% now. . A similar one upstairs without a car spot sold for under 510K April 2020

 

The spike since December has been astounding. I was looking at a site in Safety Beach with an indicative price of ~800k that sold for $1,23M! The prices on the Mornington Peninsula of late have been remarkable to say the least. Another property I was looking at in Preston was struggling to sell with a range of $1.1-1.2M in late November but sold for $1.515M this week.

I wonder if we are heading into a period of exponential growth like in the early 80s and ~87 with a doubling in ~3 years in some areas? Just saying...

 

It's interesting you say this as I was having this exact discussion with some friends yesterday. It's fast becoming apparent that this may be more than just a regular boom. I'm not complaining

 

This in my opinion is exactly where we are heading. The last few years of the cycle usually has enormous returns. What follows however for those who buy at the end is the tricky part.
Roaring ‘20s 100 years on, this time to end mid decade 2024/5 is my opinion.
Great time to start paying down debt/filling up offsets, ride the wave, keep doing loan top ups/re-fi as equity position improves and get ready to go an a once in a lifetime buying spree in about 5 years time. This is what I’m doing anyway.

 

Everything in camberwell, surrey hills etc in melbourne seems to be getting snapped up. Generally 10 to 15 pct over top of the estimate ..... thought there were laws about that? I think its at least covered all the losses from the peak in 2017/ 18. Im also noticing a finished house with 4 bedrooms seems to command a bigger premium than large land content relative to 5 years ago. With wfh people need space now.

 

Been keeping an eye on the unit market in Camberwell, Surrey Hills and Glen Iris area.

This one sold yesterday for 990k (It's 1 of 2). Couldn't make the auction but very good price given it's only a 2 bedder with one bathroom.
https://www.realestate.com.au/sold/property-unit-vic-glen+iris-135325514

I went to the inspection of this one a week or so back. Absolutely packed with young families at the viewing. Sold prior to auction in the 1.1mil range. I'm surprised they didn't take it to auction as I think they could have got a lot more. This unit was part of a 4 unit villa complex which appears to have been separated and titled out to each unit.
Sold 869 Riversdale Road, Camberwell VIC 3124 on 10 Feb 2021 - 2016751178 | Domain

Will be very interesting to see how things shape up over the next few months. The unit market had been going crazy up until march last year due to covid. Hoping it will hit new highs as the year goes on.

 

Surrey Hills and surrounds area observation

500-700K - Hot due to SMSF battling with Aspirational buyers (FHB) units (older style)
800-1M larger units 1 of 2 or 3, OK market but mainly FHB and budgets are more fixed

Investors outside of SMSF are still on the sidelines (finance will never be again as easy as 2015)

1.5-2.5M family homes stock in non-existent

Land to build on is the alternative but end product will need to be worth 3M plus and thats a different market and is OK but nothing crazy

For the 1.5M plus market the question is whether the Chinese money will start to flow again. This market affects everything as this market needs to grow for trickle down effects to the lower end of the market. Local demand is strong but need the investors (non SMSF) and Chinese money to flow if to see crazy growth like 2011-2017

 

No complaints here either and I think the possibility of a condensed mega boom is a very real possibility. The serendipity is great and the growth in the last 6 months appears the fastest of my experience going back to 2006. I was looking to sell this year but I'll certainly be holding now.

I'm just waiting for the vigour when global infections and deaths are under control and the vaccines play their part and we move into a pandemic management phase. We, in Australia, should be confident because we are and have been exceptional compared to similar Western countries. Sustained low interest rates will play their part too.

 

Yep, I'm reminded of the plight of buyers who purchased in the early 90s just before or during the recession and had to wait until the end of that decade for any growth to return or to even return to their purchase price. Being nimble and planning for future moves is key. No doubt there will be Henny Pennies denying the boom even when we are up >50%. When the group-thinkers catch on it will be too late and the risk of a post boom hangover will surely be certain.

 

The December seller probably missed out on a cool 100k plus. Much bigger block, much nicer house, and better street.
15 Mountain View Parade, Rosanna, Vic 3084 https://www.realestate.com.au/sold/property-house-vic-rosanna-134877438
46 Invermay Grove, Rosanna, Vic 3084 https://www.realestate.com.au/property-house-vic-rosanna-135343402

 

Advertised at 730k - 800k. Sold today for 951k. 2 bed villa unit in Surrey Hills.

https://www.realestate.com.au/sold/property-unit-vic-surrey+hills-135410710

 

Dated stuffs too. Good result

 

The Australian has published couple of articles with tables showing the best and worst performing suburbs for houses and units in each major cities for 3 months up to Feb 21. The tables also includes 1 year and 5 year price growth for those suburbs.

For Melbourne, all the top 10 suburbs for price growth in last three months (houses) are in Mornington Peninsula while the bottom ones are mostly inner suburbs. This is not a surprise.

What I found interesting was that according to this data (CoreLogic), Hawthorn house prices has only grown 2.6% in last 5 years (median $2.47m) and Canterbury has not grown at all (median $2.63m). Question to the people who follow these suburbs - do you think this is accurate reflection of the reality?

 

It is partly true.

I am invested around Mornington Penn region (Frankston) and the suburbs surroundings those are on fire, especially bringing a lot of OO that are priced out of Mt Eliza & Mornington - which are up almost 30% in 12 months and buying in Frankston South and Frankston.

Middle ring is now on the move (especially in the past 4-8 weeks) however excludes suburbs with a lot of o/s students/ new migrant accommodation - Springvale, Clayton, parts of Doncaster. We are seeing record results each week around Burwood, Mitcham, Blackburn, Vermont, Vermont South, Coburg, Preston, Reservoir etc.

Kew, Canterbury, Mont Albert Glen Iris are now moving very strongly. These are the suburbs I follow very closely. Attended auction of 9 College Pde Kew yesterday with expectation of $4.75m but sold for $5.5m.
https://www.realestate.com.au/property-house-vic-kew-135523870
This is at-least 15% higher than what it would have fetched 12 months ago.

21 Howie St Glen iris last weekend sold $500k+ above reserve for $3.4m. Again at-least 15% higher than what it would have fetched 12 months ago.

53A Peate Ave glen iris (new build on 480 sqm) had the expectations of $3m new and now sitting at $3.8m as the market improved considerably
https://www.realestate.com.au/property-house-vic-glen+iris-135511842

So, good quality houses in inner-east suburbs are selling at 15% premium now - however units/ TH are not, and in fact some of the results I have seen for units are similar to what they would have fetched 3 years ago.

 

Surrey hills and mont albert took off from 2012 to 2017, and before covid qere still below the peak. But from what i have seen they have skyrocketed over the past month. And stats dont tell whole story eg mont albert currently shows median 20pct higher than surrey hills for dec qtr. Normally they are round the same. So guess more houses sold in mont albert, more townhouses in surrey hills.

 

I see your Peate Avenue and I raise you 1 Cusdin St

1 Cusdin Street, Glen Iris, Vic 3146
https://www.realestate.com.au/property-house-vic-glen+iris-135578002

Listed at $5m-$5.5m, similar to the Peate Avenue property but instead of 5 bedrooms just 3...