Weather cools as clearance rate heats up

Nicole Lindsay

May 14, 2012

A handful of bumper results and strengthening auction clearance rates put some life back into Melbourne's struggling auction market at the weekend.
The auction clearance rate hit 63 per cent, a number not seen since February when demand, pent up after the summer holidays, boosted activity.
The rate from the Real Estate Institute of Victoria was based on 591 reported auctions with 63 results still outstanding.
REIV spokesman Robert Larocca said the steadily improving clearance rate showed there was resilience in the market.
Four properties sold for more than $4 million, three of them in the Boroondara area, and three of them under the hammer.
It's a sign of growing confidence at the top end of the market and in the economy, despite the political imbroglio over the federal budget.
RT Edgar director Jeremy Fox, who sold this week's biggest-selling house, in Toorak, said the Reserve Bank's move to cut interest rates by 50 basis points two weeks ago was a factor.
''The fact that interest rates are not going up but going down gives a lot of confidence. If people have businesses - and they're the ones buying the big houses - they get nervous when interest rates are going up and they pull back,'' Mr Fox said.
''I'm finding things are stabilising and there is more confidence coming back into the market.''
National Australia Bank chief executive Cameron Clyne reckons there will be further interest rate cuts during the year.
''We are likely to see a further 50 basis points in the course of the year,'' Mr Clyne told the ABC yesterday.
Any further fall in house prices depended on the unemployment rate, he said.
''If there is going to be a fall it's going to be very moderate and the economy has been able to absorb the house price declines to this point,'' he said.
Last week, the Australian Bureau of Statistics revealed an increase of 15,500 jobs last month and a 0.2 percentage point fall in the unemployment rate to 4.9 per cent.
Jellis Craig director Alastair Craig said the Boroondara market was performing strongly.
On Saturday he auctioned two of the highest-priced properties, a new French provincial-style house at 20 Fellows Street in Kew's Studley Park precinct for $4.4 million, and a renovated Edwardian at 6-8 Fitzgerald Street in Balwyn. ''It's not often you get to knock down two $4 million-plus property on the one weekend,'' Mr Craig said.
''And we sold five out of five properties over $2 million. People have been talking down the $2 million-plus a bit but to have five out of five shows it's coming back.''
Mr Craig said the buyer of the Balwyn property had decided to go to the auction that morning and was unknown to the agents.
The house was on a large 1786-square-metre double block and had a pool and tennis court.
It seemed the buyer had just started house hunting and had already found his quarry.
''It's hard to buy a four-bedroom fully renovated house in this area - with pool and tennis court - for under $4 million,'' he said.

Wednesday 16 May 2012