No slow down for Melbourne property market

Melbourne property market continued its incredible run at the weekend and because of strong demand, shows no signs of slowing.

This weekend, 739 out of a reported 875 auctions resulted in a sale, producing another high clearance rate of 84 per cent.

Though it’s usually the weakest quarter, the first three months of 2010 were at their strongest since 2003, according to the REIV.

Melbourne’s median house price dropped just 2 per cent to $524,500, while unit and apartment prices grew by 2 per cent to a record $450,000.

The median price of houses sold at auction rose by 4.4 per cent to $720,000 and apartments increased by 3.5 per cent, putting more stress on buyers.

REIV chief executive Enzo Raimondo said the most demand and the greatest price increases were being felt in some of the most expensive suburbs.

“The largest increases in median prices were recorded in Malvern East, Brighton, Frankston South, Footscray West, Ascot Vale, Glen Iris, Kew, Camberwell, Surrey Hills and Blackburn – six of which have a median in excess of a million.”

This weekend, almost 100 properties sold for more than $1 million, with another 10 selling for more than $2 million. Two subdivided blocks of land in Toorak at 4 Trawalla Avenue fetched more than $5 million each at auction.

There were seven bidders for 5 Ross Street, Kew, which went under the hammer for $2.26 million, $260,000 above its reserve.

Noel Jones group chairman Adrian Jones said the house was going to be demolished; part of an increasing trend towards viewing inner suburban property ”purely in terms of land value”.

Ruth Roberts, of Woodards, said one of their properties at 21 Manchester Grove in Glen Huntly was on the market for private sale for three weeks without getting an offer.

It was then put to auction and attracted six bidders, selling for $917,000, above its $860,000 reserve.

JPP Buyer Advocate Catherine Cashmore said the only way to cool the market was to increase supply, and this would take time.

Malcolm’s Real Estate chief executive Frank Hellier said 1 Maude Street, Cheltenham, had five competitive bidders, who pushed the price to $778,500, past a $630,000 reserve.

”I think if the interest rates continue to increase, it might take the edge off the market in the next six months,” he said.