Spring 2023 is done and dusted.
In 33 days, it will be 2024. Friday is the first day of summer. It’s hard to fathom… especially given the drab weather this week.
From a real estate market perspective, spring 2023 was a very solid and productive one. It was far better than spring 2022 in terms of volume, clearance, and prices.
It was not as hot as 2016 or 2017, and certainly not as crazy as the heady spring market of 2021, which was arguably the strongest market Australia has ever seen.
Overall, if had to give the Stonnington market a report card for spring, I would award it with an ‘A’.
Mind you, there were some quality renovated homes that helped drag the overall mark(et) up.
Apartments would get a pass mark, or maybe a ‘C’, and unrenovated homes and townhouses would get a ‘B’.
This spring we finally saw volumes return to normal levels. Interestingly, clearance remained very buoyant even as auction numbers doubled compared to the preceding months.
Prices have clearly risen this year and have been recovering in Melbourne since January.
It’s difficult to quantify the price gains while they are happening. They only become clear retrospectively, a bit like how you don’t notice your toddler growing day-by-day, until you look at their clothes from six months ago and realise just how much they’ve grown.
It feels like Stonnington house prices are up by at least five to 10 percent over the last 12 months.
The disparity between unrenovated and renovated properties has continued to widen.
Jellis Craig was running at a very impressive 80 percent clearance rate, on average, from February until September 2023. This dropped down to a respectable 70 – 80 percent clearance rate in October and most of November until last weekend, when it dipped to 63 percent – the lowest level so far this year.
It is normal for the market to ease slightly in late November and into December, as the quality of stock tends to decline, the best buyers have bought, and people start to switch off and move their focus to 2024.
Having said that, quality properties are still absolutely flying as they remain scarce, and motivation is very high at this time of year for those buyers keen to secure a home pre-Christmas.
We had a volcanic auction at 16 Errol Street, Prahranon Saturday. It was over in a flash, with four bidders scrambling to get their hands up as the bidding raced past reserve and to the ultimate selling price in about 60 seconds.
As always, quality homes attract competition and premium prices whether the clearance rate is at 60 percent or 90 percent.
Conversely, overpriced homes – even quality ones – were still passing in on vendor bids during the once-in-a-lifetime market boom of 2021.
Market sentiment is fluid. Interest rates are fluid. Immigration is fluid.
Markets ebb and flow but the fundamentals do not change.
Period homes in the leafy and affluent inner-city suburbs of Melbourne, surrounded by great amenity, are always in demand.
16 Errol Street is a charming Victorian weatherboard home on the doorstep of Hawksburn Village. It has stood for 130 years.
Its value has gone up 67-fold since 1978. It’s a rock-solid investment… Around a 10 percent annual return, compounded for the last 45 years. Tax free if it’s your PPR.
But that’s not even the best part. The best part is that it’s been a beautiful place to call home for many generations of families, in an incredible lifestyle location.
It’s all good and well to talk about the market, but sometimes we forget that real estate, at its core, is about having a roof over your head and a place to call home.
David Sciola 