A couple paid $1,425,000 for a Brunswick house with scope to update, after seven bidders fought it out at auction on Saturday.
The two-bedroom property at 30 George Street was listed with a $1.1 million to $1.2 million price guide and had a $1.2 million reserve.
The auction was held two weeks early after hundreds of people inspected the property, which featured art deco elements and a block of about 442 square metres.
The auction started slowly with a $1.1 million bid, and bidders included prospective owner-occupiers, including families, looking to renovate the older home. Over 200 groups inspected the property during its campaign.
Michael Chan from McGrath Coburg/Brunswick said the home was appealing because of its renovation potential and location.
“[The home] has a lot of original features, but it only has one bathroom, two bedrooms, and a basic kitchen. It has a good-sized backyard. The house probably needs to be restumped,” he said.
“There’s a fair shortage of properties in Brunswick at the moment… There’s a lot of live music, great restaurants, cafés… Brunswick has really taken the step forward. A lot of people lived in that street for a lifetime. So when properties do come up in the street, they tend to be quite popular.”
The property was secured by a couple planning to move, while the underbidder was also a prospective owner-occupier.
Chan said buyers for this home were largely insulated from the interest rate rise.
“The bulk of the buyers that we had here had already had their pre-approvals, and their finances already organised and worked out exactly where they wanted to go.”
The property was one of 656 scheduled to go to auction in Melbourne this week. By Saturday evening, Domain Group recorded a preliminary auction clearance rate of 66.1 per cent from 449 reported results throughout the week, while 50 auctions were withdrawn. Withdrawn auctions are counted as unsold properties when calculating the clearance rate.
Elsewhere, a unit in Reservoir sold for $656,500 under the hammer on Saturday following a two-bidder contest between a first-home buyer and an interstate investor.
The two-bedroom property at 1/32 O’Connor Street had a price guide of $580,000 to $638,000, with the reserve set at $650,000.
There is no legal requirement for a vendor’s reserve to be in line with their property’s price guide.
The vendors, two friends who purchased the property together when they were teenagers, decided to sell it.
Bidding opened with a $550,000 vendor bid before the two buyers competed to $630,000, at which point the Sydney investor withdrew. The purchaser, a young professional first-home buyer, then advanced the bid to meet the reserve.
George Ioannou from Harcourts Rata & Co said its older-style design, larger internal space, and character features helped drive interest, as well as its location.
“Reservoir is still affordable, and it’s within 12 to 13 kilometres of the city. It’s a big suburb. There are four train stations. It’s got a lot to offer…one of those suburbs that’s got something for everyone, not just first-home buyers, but even nice homes, big homes, affordable homes as well,” he said.
He said interest rate uncertainty was already affecting the first-home buyer demographic.
“The first-time buyers are spooked. They’re scared… And I didn’t have that with the other properties that are $1 million plus,” Ioannou said.
A double-storey townhouse in Bulleen sold for $1.05 million following post-auction negotiations.
The three-bedroom home at 2/1 Warringal Street had a price guide of $970,000 to $1.05 million, with the reserve set at $1.05 million.
One bid was placed at $1 million before the property was passed in. The buyers, a young couple with a child, secured the home shortly afterwards.
Robert Groeneveld from Barry Plant Manningham said demand had increased for ready-to-move-in homes.
“Families coming through and now looking at townhouses, opposed to houses, because they’re turnkey, they’re more modern and they require less maintenance, especially when you’ve got two working parents,” he said.
He said Bulleen was attractive to families due to its relative affordability while still offering proximity to the CBD, schools and transport.
Recent interest rate rises “had not yet significantly affected buyer activity, with many purchasers already factoring changes into their borrowing capacity,” Groeneveld said.
Domain chief of research and economics Dr Nicola Powell said Melbourne’s lower auction clearance rate reflects a more cautious market as buyers respond to rising borrowing costs.
“Interest rate movements do impact market behaviour. It does impact price cycles and market activity,” Powell said, noting that while interest rate rises are influencing sentiment, other seasonal factors also play a role.
“I wouldn’t put that just down to the interest rate hike. I would also layer it with the thinking that you tend to find the auctions do bounce early in the year.”
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