‘They may have lost money’: Melbourne house sells for just $500 above reserve

A family home in Reservoir in original condition on “a massive block” sold to a first home buyer for $900,500 at auction on Saturday, just $500 above its reserve.

The three-bedroom, south-facing brick house at 22 Merrilands Road was on a 888-square-metre block, a short walk from Keon Park train station. It had a price guide of $850,000 to $915,000.

Selling agent Keb Nguyen from Ray White Reservoir said the home sold for less than he expected.

“The reserve was $900,000,” he said. “We’d thought we’d get a bit more.”

The auction opened at $800,000, with four active bidders up to the $830,0000-mark, when two dropped out.

“The property was declared on the market at $900,000, and then there was one more bid of $500, and that was it,” Nguyen said.

He said while the property was dated, its large land size caught the eye of investors.

“Many people saw the potential of the massive block and the home that could be renovated or expanded,” Nguyen said.

Ultimately, a first home buyer with plans to use the property as an investment was successful.

“He is looking at what he needs to do to secure the grant and the deposit scheme, so he might have to move in for a bit before it can be used as an investment,” Nguyen said.

The sellers, also investors, previously bought the property from Nguyen in 2022.

“I think they may have lost money,” he said. “I sold it to them … for $860,000 plus tax.”

Stamp duty payable on the purchase would likely have been just under $47,000.

The property was one of 246 scheduled auctions in Melbourne last week. By Saturday evening, Domain Group had recorded a preliminary auction clearance rate of 56 per cent from 151 reported results, while 22 auctions were withdrawn. Withdrawn auctions are counted as unsold properties when calculating the clearance rate.

In Wollert, a two-bedroom house near powerlines sold at auction for $518,500, nearly $80,000 over its reserve, in a runaway auction.

1 Frisby Street was listed with a price guide of $400,000 to $440,000 and had a reserve of $440,000.

Selling agent Hayden Assaad from Ray White Wollert said he was “extremely surprised” by the result.

“To be honest, we were not expecting to get that price whatsoever,” he said.

“Being so close to the power lines, and with an electrical box behind it, I didn’t expect this result, but the person who wanted it was out for it the whole way.”

Four bidders took part in the auction, among them a first home buyer and an investor.

“The investor ultimately purchased the home with a final bid of $500, after the first home buyer dropped out at $518,000,” Assaad said.

The property was a “relatively new” two-storey home purchased by the vendor as a first home, he said. Records show it last sold in 2016 for $160,000.

“[The vendor] looked after it really well, and I think that was one of the biggest draw cards: it was well presented and cared for,” he said.

In Glen Waverley, a “unit the size of a house” sold at auction for $1.365 million.

1/18 Harvie Street had a price guide of $1.2 million to $1.3 million, with a reserve of $1.3 million.

Grace Rodrigues from BigginScott Glen Waverley said there were four registered bidders but “only two really got into it”.

“It opened with a bid of $1.2 million,” she said. “But the second bid of $1.3 million meant that the other two were priced out.”

The following 10 minutes came down to a fight between a family aiming to secure a home in the Glen Waverley school zone and a downsizer, who was ultimately successful.

“The dad really wanted it. He had tears in his eyes when he didn’t get it,” Rodrigues said.

As well as the location, Rodrigues said the 20-year-old property was “unique” because it was one of the last house-sized brick units built on larger blocks before townhouses really “took off”.

“It has three-metre-high ceilings, a huge living area and big bedrooms. The land size is also really good,” she said.

The lack of steps was also attractive to the downsizer.

“As people get older, they don’t want stairs,” Rodrigues said. “So the fact that the garage’s interior access to the home was pretty flat was appealing.”

PRD chief economist Diaswati Mardiasmo said April was always a “weird time” for the auction market.

“It’s after Easter, there’s an upcoming federal budget and Anzac Day is thrown in there too, it’s like an auction clearance rate soup,” she said.

The economic climate, with recent rate rises, the war in the Middle East and rising living costs also had an impact.

“There are already those seasonal things, and then this is thrown on top,” Mardiasmo said.