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MELBOURNE’s auction market had its highest clearance rate over the weekend since the end of the property boom in December 2007.
Of the 452 properties up for auction, 83 per cent sold and 77 properties were passed in!
However, the number of properties for auction was 126 fewer than at the same time last year!
The CEO of Real Estate Institute of Victoria attributed the high clearance rate to the extension of the first-home buyer’s grant announced in last week’s federal Budget, combined with low interest rates and an increase in investor numbers.
“It’s off a low base. There were not a lot of auctions,” Mr Raimondo said.
The part of the market performing really well is priced at or below the medium of about $410,000.
“The next two weeks we expect to see just under 1300 auctions, which is a very high number of auctions at this time of the year.
“I expect the clearance rate to remain high until the September 30 when the full first-home owner’s boost will be phased out.”
Flat and apartment clearances were also strong: 90 per cent of 136 properties at auction sold.
The latest residential land report from the Housing Industry Association revealed Melbourne’s median land price grew 0.7 per cent in the December quarter to a record $152,000.
The HIA-RP Data residential land report showed the price of land in Melbourne was up 4.8 per cent over the year.
The median land price in regional Victoria fell 2.8 per cent in the December quarter to $97,250, the lowest price since mid-2007.
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Property investors should start planning now and take advantage of the next upturn in the property cycle, according to quantity surveying firm Asset Economics.
“Property booms never last but neither do property busts.”
To take advantage of the next boom, investors need to make sure they’re buying for long-term capital growth but take in account the ripple effect.
As our next property cycle comes around, it‘ll be the most desirable and sought-after areas that start growing first, and these are generally the most affluent suburbs too.
From there, capital growth starts to ripple outwards!!
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Increasing rents boosted the housing component of the Consumer Price Index (CPI) by 0.9 per cent for the quarter and the overall annual increase to 5.5 per cent, that’s according to Australian Bureau of Statistics figures released this week.
The CEO of Real Estate Institute of Australia has said, “The majority of this increase in the housing component was driven by rents, which increased nationally by 1.7 per cent over the quarter and 8.4 per cent over the year. The cities where rents increased the most were Perth and Darwin with annual increases of 10.9 per cent and 13.5 per cent respectively!”
This rent increase in the recent quarter reflects low vacancy rates and the scarcity of rental properties across capital cities, combined with the decrease in building approvals and housing finance for investment.
The National Rental Affordability Scheme should hopefully relieve this figure, however the impact won’t be felt for quite some time.
“With an underlying demand for additional housing at around 200,000 dwellings per year and commencement of new dwellings of 147,000 in 2008, Australia will need to build significantly more houses than what has occurred to meet rental demand.”
Housing affordability improved since the Reserve Bank rate cuts, although there’s really been very little flow-on benefit to those in the rental market.
“With lower interest rates and greater affordability, now would be the time for those within the rental market to seriously consider purchasing their own home.”