Brunswick: The hockingstuart mid-2012 autumn property review

Brunswick: The hockingstuart mid-2012 autumn property review
Cassidy KnowltonDecember 8, 2020

At the end of last year, predictions were flying around left right and centre about the state of the market in 2012. There was a lot of buoyancy following the RBA’s double interest rate cut, with the industry confident it would result in buyers flooding the market. In truth, while the cuts didn’t deliver the influx of buyers experts were hoping for, it has definitely boosted confidence.

It’s relatively early days in 2012 but here in Brunswick, we’re already witnessing some interesting trends take place. A key movement has been the type of buyers we’re seeing – second-home purchasers are generally married with one child. Many young professional couples are seeking apartments because they want to live within 10 to 15 kilometres of the CBD, and they’re willing to sacrifice space in order to have all the amenities nearby. Similar to the rest of the world – especially the capital cities in Asia and Europe – people are turning to apartment living to be located close to the city, a trend I believe will be highly prevalent in Australia in the next century.

We started 2012 with a bang, sitting around a 95% clearance rate in our first five weeks of auctions. In February, we sold a three-bedroom, single-fronted house in Barkly Street for $1.01 million – the highest price ever achieved for a single-fronted house in Brunswick. We’re also expecting a four-bedroom home in Kingfisher Gardens to draw a lot of interest due to its proximity to cafes, shops and public transport. A few auction sales have been 10% to 15% above the reserve, proof of increased buyer confidence, especially compared to last year when we had properties selling up to 10% below the asking price.

Auction activity has now cooled off slightly as more sellers put their homes on the market. Still, we’re finding that any properties not selling at auction are being sold pretty soon after. Auctions have now become part of a process for obtaining that final sales result. Often we need an auction to transpire to truly see what a property is worth, and for vendors to understand what the market’s willing to pay for their home.

We’re finding sellers also prefer auctions because unlike private sales, auctions are regulated. Vendors know an auction sale is final and not subject to any clauses such as finance or building inspections. Private sales, on the other hand, can typically take much longer and because they’re unregulated – buyers can get caught up in various bidding methods, be it a closed ballot, boardroom auction or informal bidding war.

Price-wise, last year was definitely a better opportunity for investors in Brunswick, but unfortunately a lot of them weren’t financially ready to buy at the time and they’re now competing – and often being priced out – by first-home buyers returning to the market.

Looking ahead, I think the doom and gloom from last year is gone and buyers are ready to settle down and secure their homes. Across the board, I predict a 5% increase in prices in areas within a 10-kilometre radius of the city – including Brunswick, which was listed by the REIV in the top 10 growth suburbs for the five years ending 2011. Clearance rates in Melbourne will remain around 58% to 63% all year, with Brunswick a little higher at 70% to 75%. Even throughout 2011 our clearance rates were hovering around 60%, attributed mainly to buyers seeing us as an affordable alternative to the more affluent neighbourhoods of Fitzroy, Carlton and Northcote. Currently our days on market are sitting at 38 days – a slight improvement from last year at 43 days – and I expect this to stay consistent for the next 18 months.

We’re at a time in the market where the playing field is pretty even, so it’s a good opportunity for both buyers and sellers alike. Buyers should bear in mind it’s always hard to find something that ticks all the boxes no matter what the state of the market, so they need to weigh up if they’re willing to sacrifice their dream home now to pay less for a property that meets 75% of their needs, or wait six months to find their perfect match when prices are higher.

Robert Elsom has 15 years’ experience in real estate and is director of hockingstuart Carlton, Brunswick and Northcote.

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