A spike in post-auction sales could indicate the Melbourne market has bottomed out, a property expert has claimed.
The city's auction clearance rate fell to 47.9% on Saturday, down from 61.2% the same week last year. However, WBP Property Group CEO Greville Pabst said an increasing number of passed-in properties are selling following "tough post-auction negotiation". Pabst said the upswing has been concentrated around the city's inner suburbs.
Though, Pabst remarks that the positive change hasn’t affected all areas and that the recent spike in buyer demand is currently patchy.
"Some areas are faring better than others, such as Melbourne’s inner east where a week ago clearance rates for units reached 90%. Despite this strong result for the east, buyers remain very selective; not only about the suburbs they wish to reside in but also about the streets and property types."
Pabst highlighted the case of bayside suburb St Kilda. He commented that the suburb has seen 'mixed results' as buyers vie for only a select few of the many properties on offer in the area.
"Buyers and tenants in St Kilda are placing increased value on security when deciding to buy or rent, with implications for demand and prices for some local properties," added Pabst, also commenting that micro drivers such as this are common to all suburbs, each with their own set of issues that buyers need to be wary of.
"Investors and even homebuyers need to understand that not every property, even those in the best of suburbs, is a good investment. There are many factors that can impact investment potential and return in the long-term. Location is but one factor to consider."
Though Pabst commented that the market may have bottomed out, he said he did not expect prices to move upward in the near future.
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