Melbourne is now Australia’s hottest property market – October 2015Data shows that Melbourne is now Australia’s hottest property market! Up until recently Sydney was Australia’s hottest property market. There are now indications that Sydney is coming off the boil and Melbourne has become the hottest property market!
What give you that idea you may ask. Well it is all in the data!
Auction clearance ratesAuction clearance rate are in indication of how ‘hot’ a property market is. The greater then clearance rates, usually the greater the gains seen in property prices. When the market is hot, vendors / sellers like to sell their property at auction. High auction clearance rates mean that bitters are reaching the property reserve prices and in many cases can exceed the reserve price by a large margin as buyers are willing to bid extra so that they don’t need to try again at the next auction and face paying even more at a later date.
Currently, the number of properties going to auction is the highest in Melbourne with over a thousand properties going to auction in a week according to Domain.com.au. With all those listing you might expect that the clearance rate goes down due to competition between properties on the market but the auction clearance rate was the equal highest in Melbourne and Adelaide. However, Adelaide only has a hundred or so auction in a week so a high clearance rate is not that indicative of a hot market when so few properties are being put for auction.
Sydney has had a good run but now the auction clearance rate is down from previous highs and lagging behind Melbourne’s. This does not mean that Sydney is dead, with around a 70% auction clearance rate, it just means that it is lagging behind Melbourne.
Property price indexAccording to the Core logic RP data home value index in the past couple of weeks Melbourne has been hitting new price highs each day. Other cities have been behind their past price highs. This may only be a rough measure but where consistent gives an indication of where the gains are being made.
Individual property salesThough not much can be gained from individual property sale prices, it can give some indication of the trend. For example last Saturday a property in Mount Waverley in Melbourne’s south east, a suburb attracting buyers for proximity to amenities especially good schools, sold for $6 million. The block was large and there was speculation that it was for redevelopment but even so if that is an indication of the land price then the land prices are appreciating quickly in Mount Waverley and surrounding suburbs.
Conclusion: Melbourne is the hottest property market and has good long term prospectsWith Melbourne headed to be Australia’s largest city I guess that it is no surprise that there is a lot of interest in Melbourne’s property market. With more and more people moving to Melbourne, more than any other Australia city, the interest in well located Melbourne property is only likely to continue in the future.
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