First home buyer nabs $740,000 Melbourne ex-rental as investors drop out

A first home buyer paid $740,000 for a Thomastown house at auction on Saturday after investors who had been interested dropped out of the race.

The three-bedroom family home at 2 Gunbower Close had been a rental property, and records show it was last advertised in January 2024 for $460 per week.

It was one of 890 auctions scheduled in Melbourne last week, the first test of the market after the federal budget unveiled changes to tax concessions on investment properties and supply measures in a bid to boost home ownership.

By Saturday evening, Domain Group recorded a preliminary auction clearance rate of 60 per cent from 564 reported results throughout the week, while 83 auctions were withdrawn. Withdrawn auctions are counted as unsold properties when calculating the clearance rate.

The Thomastown home attracted three first home buyer parties bidding at auction.

“We had a number of investors that were interested and since the budget you can’t negatively gear established properties any more, so they dropped [out], and ended up selling to an owner-occupier with vacant possession,” Harcourts Rata & Co selling agent Mario Tucci said.

The property was listed with a price guide of $690,000 to $759,000, and Tucci said he “definitely had to work for” the result.

Proceedings kept stalling, first at $690,000, then at $710,000 and then at $735,000 at which point he negotiated with the highest bidder.

The sale price of $740,000 was also the reserve price. Records show the home last sold in 2021 for $738,500.

Tucci sold another home in the same suburb in a contest of two first home buyers, fetching $710,000.

The four-bedroom house at 2 Glebe Place was listed with a guide of $700,000 to $770,000, then changed online to $700,000.

Bidding began at $650,000 and the price surpassed the vendor’s reserve of $690,000.

“The market is really tough. There is no doubt that the market is very challenging but if you are a good agent you will get deals done. There are just less buyers,” he said.

“The reserve price is really critical, in terms of vendors being realistic with the reserve.”

Elsewhere, a North Melbourne apartment passed in and was sold to a first home buyer in post-auction negotiations for $682,500.

The two-bedroom, ground-floor home with a grassy courtyard and entertaining deck at 2/60 O’Shanassy Street was guided at $650,000 to $700,000.

Proceedings began with a vendor bid of $650,000, and the first home buyer countered with an offer of $655,000. With no further bids, the home passed in.

The reserve was $700,000.

Lucas Mills Real Estate selling agent Mark Hutcheson said good properties in good locations are still selling well.

“It is obviously a pretty price-sensitive market,” he said. “The market tells you pretty quickly if you are in line.”

He said investors had been quiet in the area for quite some time now, and he had not seen that change last week, although he said it was early days.

Elsewhere, local upsizers paid $2,526,000 for an architecturally-designed home in Fitzroy North, at an auction on Friday.

The three-to-four-bedroom home at 28 Newry Street was listed with a price guide of $2.1 million to $2.2 million, but received a pre-auction offer of $2.4 million, which another party was willing to counter.

Two young professional couples who were drawn to the property’s space, design and light competed at auction, Jellis Craig Fitzroy selling agent Charles Atkins said.

Although no formal reserve had yet been set, the $2.4 million offer was at a level the vendors were comfortable selling for. They are upsizing to have more space for family and music production, as one is a musician.

The buyers are also upsizing. “They are Fitzroy North people, so it is an upsize, but living relatively close. They love the area and the lifestyle that it brings,” he said.

“The market is somewhat inconsistent at the moment, but quality homes, those that offer a point of difference, well-designed, have a high level of finish, are being well received by the marketplace.”

LJ Hooker head of research Mathew Tiller said Melbourne’s clearance rate of 60 per cent was “an okay result.”

“We say, anything above 60 per cent prices are growing, and anything below 60 per cent is probably just a little bit soft,” he said.

“It still means there are buyers in the market, people are turning up and bidding at auction.”