Melbourne auctions selling 11% above price guides

Melbourne homes were selling well above auction price guides during September, according to a Property Observer analysis.

An analysis of 67 auction sales in September revealed just three sold within the pre-auction price guide given by the listing agents.

The rest sold for an average of 11.31% above the upper bracket of the pre-auction price guides.

Almost half of them sold for more than 10% above the upper price bracket.

Homes worth more than $1 million were the most likely to sell above their pre-auction price guides with all 14 surveyed selling out of the price range indicated by agents. They sold for an average 16% above.

All but two of the 30 homes worth $600,000 to $1 million sold above price guides. They went for an average of 10.9% above price guides.

Of the 23 homes worth less than $600,000, just one sold within the price guide. The rest sold for an average of 8.77% above the upper price bracket.

One of the most extreme examples was a three bedroom house in Richmond which sold for 28.75% above the pre-auction price guide.

The property at 33 Kelso Street was advertised at $1.1 million to $1.2 million but sold for $1.545 million.

RP Data records suggests the price guide increased to $1.2 million to $1.3 million a few days prior to auction, part of the step quoting process which is now the norm in the real industry, but it still sold for 15% above the upper bracket.

That same day in Brunswick East a four bedroom house at 7 Parkview Avenue which was advertised at $930,000 to $1.02 million sold for $1.295 million – 27% above the upper price bracket.

In other price brackets on the same day a three bedroom house at 25 John Street in Oakleigh sold for $793,000 – more than 20% above its price guide of $620,000 to $660,000.

The properties are all deemed to be investment grade properties and the auctions were attended by National Property Buyers.

In August we found homes were selling 10% above price guides.

Prior to that in the lead up to Spring they were selling at 11% above pre-auction price guides.

In April this year, Property Observer noted homes were selling at 9.55% above the upper advertised price bracket.

In October last year it was 8.7%. In September it was 6.5% and in July it was 5%.