Melbourne property market: A large property in a prestigious, leafy Melbourne inner suburb that was last year sold for more than $7 million has dropped in value by more than $2 million, or 28 per cent, highlighting a sharp downturn in the Melbourne property market that until recently continued to hold its value as prices plunged in other state capitals.
The four-bedroom, two-bathroom house on a 1210-square metre block, which is close to some of the state’s most prestigious state and private schools, was passed in on Saturday for $5.6 million, having been sold last November for $7.8 million.
Melbourne’s weekend auction sales slid to record-year lows and Sydney struggled to clear half the properties for sale in another bleak outcome for one of the most important weekends of the spring sales season.
Ms Bloom blames the slowdown for a sharp increase in the number of private – or boardroom – auctions and sales by expressions of interest rather than the more familiar street auctions.
Agents that last year sold 80 per cent by auction and 20 by private sale have reversed the ratio in recent months, she said.
Preliminary results show about half of the properties auctioned across the nation’s capitals sold, according to CoreLogic, which monitors sales and prices.
Kevin Brogan, CoreLogic’s national residential auction market commentator, said Melbourne property market is “resilient” because the percentage of sales were around the same as last week despite the number of properties on offer increasing more than 54 per cent to 1700.
Adelaide had a clearance rate of about 68 per cent, higher than for the same weekend last year, from 133 auctions.
Brisbane slumped to about 34 per cent, compared to about 45 per cent for the same time last year.
The market outlook remains soft because tight lending conditions have dramatically decreased the number of property investors and made it a lot tougher for owner occupiers.
Increasing negative equity, which happens when price falls reduce property value to less than the mortgage, and fears about possible crackdown on negative gearing incentives are also weakening sentiment.
But below 4 per cent rates, double-digit discounts and lucrative cash incentives are being offered to borrowers that meet standards, typically working couples with a 20 per cent deposit.
That is creating opportunities for first-time property buyers and existing borrowers with equity that are seeking cheaper rates or better conditions.
For example, ANZ will this week announce improved rates for borrowers seeking to switch and are expanding the eligibility criteria.