The selling environment in Melbourne has been through some dramatic changes. We had a period of no auctions, and then online auctions only, a new concept for many agents.
Last weekend we transitioned to 10 only attendees plus agency staff, and perhaps soon we will return to the full open unlimited auction experience. Despite the disruption, the market has still functioned, but vendors are still wary, and stocks of quality houses low.
What we observed with the opening of the auction market was a potent reminder of the fundamentals.
One auction we attended attracted just one bidder and one other onlooker despite healthy market demand.
The fundamentals of the property weren’t quite right. The property was promoted as a sizeable five-bedroom family home, but the layout was not functional, the pool dominated the back yard, and there were no green lawn areas for children.
The gally kitchen position was separated from the family and living zones, and overall, the market assessed it as a C grade property. The market functioned efficiently, and the property attracted little interest.
The reminder to buyers and us again is that C Grade properties will always struggle in nearly all market conditions.
However, at the other end of the scale, the demand for A-Grade properties is healthy. Stock is short and will remain so. Auction competition is active with multiple bidders, and in our view, this will continue for the foreseeable future for A-Grade properties. (See our story: https://elapropertyadvocates.com/2020/04/27/buy-when-the-right-house-comes-along-dont-wait/)
And to our readers, here’s a reminder of what constitutes an “A Grade” property in inner Melbourne.
- The land content is consistent with the precinct and the property not overcapitalised.
- The location is away from main roads or busy streets and preferably in quiet and pleasant streetscapes.
- The property is ideally walking distance to shops, medical facilities, open spaces, school and transport.
- The building itself. Scarcity, for example, period homes, the build quality, orientation on the block and a functional floorplan.
As buyers advocates, we work for you to assess properties you may be considering now. Is the property your looking at an A – B – or C grade property? We also source properties if required, and negotiate on your behalf.