In the wake of the election shock result, APRA’s recommendation to ease lender’s servicing buffers, and talk of further incentives for First Home Buyers, it should come as little shock to those watching Melbourne’s property market that a fresh sense of optimism now circles our market.
The past two months in particular have been plagued by a looming Federal election, inciting ‘doom and gloom’ feelings for some, and a “wait-and-see” rationale for others. Many buyers have sat on the sidelines to see what the impact of a new Government could have been, along with Labour’s prescribed changes to our existing tax policies around negative gearing and capital gains tax.
Who would have thought we’d re-elect the Liberal Party?
Clearly not the pollsters…
Of our more limited selection of clients during this time, we did have the pleasure of helping them adopt a contrarian approach. Not only did these buyers enjoy a lesser sense of competition for A-grade properties, but they could arguably look at their acquisitions in retrospect and correlate their contract dates with the bottom of our market.
This is yet to be proven, but according to quite a few economists’ opinions this week it’s, completely conceivable.
We have collated our top five recent buys that we believe our contrarian clients’ approach rewarded them significantly for. Each property was secured with far less competition than would typically be faced for such an asset type, and it’s fair to say that market sentiment at the time of the purchase negatively impacted the vendor’s campaign and ultimate result.
Number one is a period single-fronted Victorian cottage in a quiet street in Footscray that we secured for an investor client for $700,000. Calculating that their likely dwelling category for this budget would be a small townhouse, we had targeted two-bedroom townhouses in Melbourne’s inner north/west as a strategy for capital growth. When this property passed in and a later price drop was advertised, we pounced. It has been quite a few years since a renovated period property on a street like this has sold at the $700,000-mark. Local Agents would agree that fifteen months ago, a mid-eights result would have been fairly anticipated.
Number two is this weatherboard family home in a great pocket of Sunshine North. Advertised earlier with an “Expressions of Interest” campaign, this sale demonstrated that not only do EOI campaigns struggle in down-markets, but first homebuyers in this price-contingent feel uncomfortable about putting an offer forward in a non-transparent scenario. Moving forward with a seven day finance clause and an offer of $550,000 secured this first home on a 497sqm block for dear clients of ours who were placing their feet on the property ladder.
Number three is another cutesy Victorian cottage with an amazing and modern rear extension and renovation. After having passed in and experienced some to-and-fro with another opportunistic buyer, the agent bought the battle to a head with a “Best and Highest” offer process. We secured this Northcote gem for $1.02M for overseas expat investor clients who knew the area and recognised a good buy when it was presented to them.
Number four goes to this olde world stunner of yesteryear, on a wide frontage and 370sqm allotment that will no doubt command some serious works from it’s new owners. It stands to prove that sometimes an optimistic wish-list and a belly full of courage can do the trick when buying property. After battling with lender scrutiny and remaining focused, not just over several; but many weeks’ of back-and-forth, they resolved their pre-approval and jumped into the market to seize their opportunity. Within one week, they had an acceptance of an $850,000 unconditional offer for this exciting project in Seddon.
Last but not least, was a stellar auction that Amy attended for a client who’s mandate was to find a secure, quality two-bedroom unit within walking distance from the MCG and the Epworth Hospital in Richmond. Amy collected the keys when the hammer fell on a bid of just $580,000. Ordinarily, apartments like this attract pricetags well into the sixes.
Today’s auction scene felt a little bit more energetic for us, and even this red brick renovator in Kathleen Street, Preston (below) attracted a strong crowd despite breaking records on the bad-smell meter. Six bidders fought hard for a rough diamond up to $768,000, in the face one of the agent’s claims two days’ prior, suggesting that the campaign was struggling and an expectation of mid-sixes was on the cards.
It is yet to be seen whether our metro market may have turned a corner, but one thing is for sure…. the mood feels different.