Melbourne Market Solid

The Melbourne property market remains solid this week despite some forecasts of a winter downturn. A Fitzroy North property fetched the highest house price at auction of $1.7 million over the weekend whilst a York Street, Prahran apartment sold for just under $2.5 million.

Supply/demand ratios are favouring buyers at present however, well presented homes, marketed correctly and with realistic reserve prices, are still generating plenty of interest and delivering strong results at auction. The year to date auction clearance rate sits at 61% with an average of between around 700 auctions each weekend in May according to Real Estate Institute of Victoria figures.

Astute investors are seizing every opportunity to grow their property portfolios snapping up well located houses and apartments close to infrastructure and within easy reach of the CBD. First home buyers are slower to take the plunge, most likely due to decreasing government grants and bonuses and the persistent media talk of further interest rate rises. But this may change with a 20 per cent decrease in stamp duty fees for eligible first home buyers starting July 1, 2011.

The metropolitan rental market continues its six-year trend of low vacancy rates. The most figures from March were 1.7 per cent, down from 2.3 per cent in December 2010. The last time the rental market recorded the ideal “supply/demand” balance was in January 2005, when the vacancy rate was 3.3 per cent.