September was a good month for the property market in Melbourne, recording strong auction clearance rates and sale prices for apartments and houses at their highest in a over a year. Investment properties in Melbourne continue to be snapped up by savvy buyers, and the high clearance rates combined with an increase in listings and exceptional sales results show no sign of slowing as we come into the middle of Spring and onto the busy Summer season.
According to RP Data figures as of the end of September, the city has now moved into its 13th “super Saturday” in terms of auctions results for the year, up from the record set last year which was counted at 11. The auction clearance rate is sitting at close to 75%, an extraordinary figure considering that some properties are selling way beyond their reserve prices – in Middle Park, for example, the Greg Hocking Real Estate Agency recently sold a one bedroom apartment for an impressive $740,000[i].
Interestingly, demand for apartments is at an all time high, with many properties selling within days of listing. Apartments in Melbourne’s Northern and Western suburbs such as popular Essendon and Maribyrnong were selling quickly, with high demand from potential buyers. This is good news for anyone looking at investment properties in Melbourne or thinking of buying off the plan for future capital growth, and these type of suburbs are an investor’s dream, with high rental demand and good rental returns, excellent infrastructure such as transport, schools and shopping, and close proximity to the CBD.
Overall, the property market around Australia continues to power ahead, with Sydney property prices increasing by almost 14.5% during the past year from September 2013. Melbourne recorded the second highest increase of 8.1%, followed by Darwin at 7% and Brisbane at a healthy 6.4%. In total, the average increase in property prices in Australia this year in the capital cities was over 9%. This compares to a rate of 3.3% for the rest of the country, including regional and country locations.
The lesson from these figures is that if you are considering buying investment properties in Melbourne or in other states in Australia, it is important to focus on real estate that is located close to the CBD, in areas of high rental demand and good returns, and where the long term outlook for capital growth is positive. As an investor it is always a good idea to conduct research on the type of property you might want to look at as well as the locations you should target in your search. You can also talk to a property investment company such as Ironfish to get the latest market research, “on the ground” knowledge and insight to give you the leading edge in today’s competitive market.