The market is hot. And heating.
Media reporting is now suggesting that prices were up 0.8% in Melbourne for the month of October. It feels more like 10% on the streets.
Saturday was our first real weekend back with public on-site auctions and there were some absolute flyers.
16 Mackay Street, Prahran sold for $450k above the top end of the range for an unrenovated/unliveable double fronted period home on 426sqm (Biggin & Scott)
2 Park Lane, South Yarra sold for $400k above the top end of the range for an unrenovated Victorian home just off Punt Road (Kay & Burton)
49 Aberdeen Road, Prahran sold for $125k above reserve for a very well presented two bed, one bath Edwardian house on 147sqm. (Jellis Craig)
And I’m sure many of you know about the four main road houses in Brighton, renovated by amateurs, which each sold for around $700k over reserve. Now that’s just silly!
Let’s discount The Block auctions because they are not a true reflection of the market.
But even with a very small sample size from Saturdays’ aforementioned Stonnington auctions, it is only in a (rapidly) rising market that agents get the quote price so wrong and properties sell for hundreds of thousands of dollars above the range.
Why does this happen? Because in a rapidly changing market (either up or down) the conversations and advice on value preceding the campaign, and based off the comparable sales at the time (i.e. three to six months ago) are now irrelevant.
COVID discount prices are a thing of the past. We are currently in a post-lockdown boom. For now.
The shift has been pretty rapid over the past few months. We get a good gauge from our daily conversations with buyers, which have gone a little bit like this in 2020…
April – “We are going to wait and see what happens with COVID. There will be some absolute bargains soon! Did someone mention distressed sellers??”
August – “We couldn’t buy even if we wanted to. There are no houses on the market.”
September – “I’m going to wait until Job Keeper ends and see if there are some better opportunities then. Surely there will be a flood of stock when the mortgage holidays end?”
October – “Everything is getting snapped up pretty quickly. I’m still waiting for more stock.”
November – “These prices are pretty strong! And why is everything selling within two weeks?”
December – “Damn it. I should have bought in April – September. I’ve been priced out. Again.”