Welcome to the Inner Circle - your inside look at the Victorian property market.
To date, 2015 has proven a stand-out year for investors and home-owners alike with the Melbourne market recording gains of around 11% for houses and about half that for apartments.
But a closer look reveals that all properties are not equal with some breakaway performances by specific property types in certain locations. Inner and middle suburban house prices recorded an average rise of 13.6% according to the REIV, more than double the price rises seen in many outer suburbs.
But even within the same suburb, our analysis shows that the ‘performance gap’ between in-demand properties and others surrounding them in the right areas can be stark.
For investors, now more than ever, they name of the game is ensuring they get their property selection process right.
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Auction clearance rates are one useful indicator of how the market is travelling with clearances above 65% indicating the market is in a growth phase.
Melbourne’s clearance average was just 61% in 2012, but climbed to 71% in 2014. It then powered ahead to over 80% at the start of this year before falling back slightly to 78%.
Some in the media made much of this slight decrease, but I would say the market has held up remarkably well considering the increase in properties for sale and the decrease in buyers coming from China - down by around 30% in 2015.
The clearance rate will be tested in the busy Spring season with many agents reporting a significant increase in the numbers of properties they have listed for auction.
No doubt there will be other challenges for the market to overcome, like the recent volatility we have witnessed in world share markets. But that volatility has a silver lining for property owners as the recent ructions are likely to delay any upward movement in interest rates.
After they had spent months looking for an investment property without any success, I met with this delightful client in early June. A review of their strategy highlighted why their search had been taking so long and only meeting with frustration.
They had many good ideas about what the right sorts of properties for investment were, but they were looking in the wrong area for their combined strategy and budget.
Instead of a fruitless search in areas they were familiar with, the Property Mavens team identified two ‘up and coming’ pockets in Ascot Vale; where we found this wonderful Victorian era cottage.
Despite some spirited bidding on the day, we were able to buy this property under the hammer and within their budget - securing Nicola and Mike's retirement strategy.
If Mark and Nadine’s story sounds familiar and you would like to understand what you can achieve with your budget, then an end to your problems may be at hand.