Richmond property prices defied downturn in 2011: Jellis Craig
The overall Melbourne market declined 6.1% in December, according to RP Data, but the median house price in Richmond increased 4% during the year, according to Jellis Craig's Annual Property Review.
"From December 2010 quarter to December 2011 quarter median property prices in Richmond increased from $816,000 to $852,000, showing a modest growth at odds with the softening of the market nationally and showing that local variations distinguish the current market," says report author and Jellis Craig Richmond director Clayton Smith, who also auctioned one of the properties for sale on the Channel 9 series The Block.
Smith says, however, that it took longer to sell property during 2011, and that sales volumes were down.
"While we saw some bounce back in values, the volume of properties transacted was significantly down in 2011, with 103 fewer than in the preceding 12-month period; particularly in the $1 million plus price bracket. The number of average days on market increased slightly from 28 to 34 compared with the previous year."
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Source: Jellis Craig Annual Property Review
"The two interest rate reductions by December 2011 produced an immediate response from buyers, with more vigorous bidding competition at our auctions and producing some exciting results well beyond expectations.
"Although new home lending has been down, lending for existing properties has been trending upwards, and evidence suggests that borrowers remain more than able to service loan repayments and that many potential buyers have access to a house deposit."
Smith is optimistic for the Richmond market in 2012.
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Source: Jellis Craig Annual Property Review
"The current market balance could be tilted by any additional reductions as buyers tired of waiting for what might be considered ‘the right moment’ enter the market. This could potentially tip the scales slightly in favour of sellers when friendlier interest rates meet pent-up demand," he says.
"The year has begun on a positive note with both buyers and potential sellers making contact with the office early in January, signalling their intention to transact this year."