First home buyers snap up Richmond terrace for $1,286,000 after dad steps in

First-home buyers snapped up a neat but less than glamorous Victorian terrace in Richmond for $1,286,000, after being helped by the ‘bank of mum and dad’.

The buyers, a young couple, were in a fast-but-fierce battle with another couple, who were also first-time buyers, for the five-bedroom home at 201 Swan Street, which sold for $86,000 over the advertised reserve.

Bidding for the property, which last sold 30 years ago, opened with the buyers’ $1.1 million offer, kicking off an aggressive tussle that lasted seven minutes.

BigginScott’s Ignacio Rodriguez said the buyers were shocked but ecstatic when the hammer fell, realising they had bought the property.

“It was a proper whirlwind of emotions for them,” Rodriguez said. “Just past the reserve, the buyer got stuck, but the girlfriend’s dad stepped in and said he’d pitch in a bit to make sure they got it.”

For the vendors, the auction was just as emotional.

“While it was an investment property for them, they originally lived in Richmond and had the same tenant in there for 20 years, so it meant a lot to them,” Rodriguez said.

The Richmond terrace was one of 838 scheduled to go to auction in Melbourne last week. By Saturday evening, Domain recorded a preliminary auction clearance rate of 56 per cent from 612 reported results, while 102 auctions were withdrawn.

Withdrawn auctions are counted as unsold properties when calculating the clearance rate.

It was the highest clearance rate among the nation’s capitals, but comes just days after Domain’s September quarter data revealed Melbourne house prices slid -3.3 per cent to a $1,014,335 median.

Median prices are expected to dip below $1 million by December.

In Malvern, a three-bedroom house at 8 Canberra Grove passed in on a $1.8 million offer, below the $1.85 million reserve, after bidding between two buyers stalled.

The home, which has been owned by the vendors for 40 years, has now been listed for private sale for $1.85 million.

Belle Property South Yarra’s Grant Wallace said listing the reserve price had impacted the sale, with new Victorian laws now requiring reserve prices to be listed at least seven days before an auction is held.

“I think the minute you put up a reserve, people automatically feel like it’s too much money,” Wallace said. “No one wants to pay the sale price.”

Wallace said some house sales were struggling, though apartments were still selling well.

“In terms of prices being achieved, they are not as much as they were a year ago, but houses have taken more of a hit,” Wallace said. “I’m selling houses for what I was selling them for eight to 10 years ago.”

In Northcote, an immaculate four-bedroom house at 106 Kellett Street sold for $1.5 million, which was $150,000 over its $1.35 million reserve, after four bidders competed for the keys.

A vendor bid of $1.25 million kicked off proceedings, sparking a flurry of $10,000 offers between three buyers. At $1.4 million, one buyer dropped out and another jumped in, exchanging $5000 rises.

After 15 minutes, the hammer fell with a young couple, who were renting in the area, becoming the new owners.

Nelson Alexander Northcote’s, Matthew Akritidis, said the buyers were immediately congratulated by their new neighbours. He said buyers liked the transparency of knowing the reserve heading into the auction.

“They saw value,” Akritidis said. “It’s also not often that you get a four-bedroom home in that area.”

LJ Hooker’s head of research and business intelligence Matthew Tiller said that while Melbourne’s market was by no means strong, a lack of listings following a prolonged downturn had helped elevate clearance rates.

“There are buyers that see good value now in Melbourne,” he said.

Tiller said spring listings were at least 40 per cent below normal, propping up clearance rates, and the new reserve rules may also have weighed on listing numbers – though there was only a week of data.

“From the buyers’ point of view, the reserve publications are seen as a positive thing – but it does make it difficult in a soft market for agents to price accurately,” he said.

Tiller said many were bracing for another interest rate hike, which was further fuelling hesitancy from both buyers and sellers.

“If you look at inflation, it’s still sticky, and there are still some price drivers that could see another lift in rates,” he said.