On coronation day, a three-bedroom Victorian home on the aptly named King Street in Essendon sold under the hammer for the princely sum of $1,787,500 – above its $1.6 million to $1.7 million guide.
The home, at 41 King Street, needed some work, but it still attracted two bidders who competed for the keys. The ultimate buyers were a young family who are now hoping to renovate it.
Jellis Craig Moonee Ponds director and auctioneer Christian Lonzi said bidding was slow to start, opening on a vendor bid of $1.6 million.
A $1.65 million offer followed the vendor bid, with a stream of $25,000 and $10,000 bids seeing the property reach its sale price.
The auction was one of 644 scheduled across Melbourne. By evening, Domain Group reported a preliminary clearance rate of 75.5 per cent, after 490 results were reported and 32 auctions withdrawn. Withdrawn auctions are counted as unsold properties as part of the clearance rate.
Lonzi said he had spoken to buyers affected by the rate rises, with some realising they would have to pull back from buying as they would not qualify for the amount they needed to buy properties like King Street.
“Even though interest rates went up, we still had good numbers at our open for inspections,” Lonzi said.
In Highett, a first home buyer dropped $1,005,000 on a three-bedroom home at 1/136 Highett Road, beating out three other bidders to win the keys.
“It was really, really exciting for him,” Woodards Bentleigh’s Ben Quigley said. “He was quite emotional.”
The home sold well above the $800,000 to $880,000 guide, with bidding kicking off after a vendor bid of $800,000. In the end a final $5000 bid from the buyer won him the keys.
Quigley said the buyer had bought in the area because he wanted to remain close to family who lived nearby.
A recently renovated Edwardian house in Clifton Hill sold under the hammer for $1.9 million, more than doubling in less than three years thanks to fierce competition between three bidders.
The sale price for the three-bedroom home was $250,000 above the $1.65 million reserve and more than double what the vendors of 2a Gordon Street paid in 2021, when they bought the then-unrenovated property for $840,000, records show.
It was refurbished by a local firm, Sally Draper Architects, before going to auction with a $1.5 million to $1.65 million price guide.
Nelson Alexander Fitzroy partner Peter Stephens said the result was incredibly strong, especially in a week when interest rates rose for the 11th time in the past 12 months.
The cash rate rose to 3.85 per cent on Tuesday after the Reserve Bank board met – its highest point in 11 years – pushing interest rates on mortgages higher and cutting buyers’ budgets.
“I think you’ll find people who have pre-approval [for a mortgage] in place, they’re wanting to use it when they can,” Stephens said. “The lack of stock also means that when a buyer finds something, they have to go for it.”
Bidding on the Clifton Hill property opened at $1,565,000 in front of a crowd of around 40 people, with the three active buyers taking the price well above the reserve.
A crowd gathered for the auction in Clifton Hill.Credit: Simon Schluter
In the end, it was a $1.9 million bid that got the deal done. The buyer plans to live in the home.
Nelson Alexander auctioneer Rick Daniel said the result and “fierce” bidding emphasised how buyers were still hunting down turnkey homes.
“Buyers don’t want to think about spending more money on renovating or improving the property,” Daniels said.
It comes as Melbourne’s clearance rate reached an 18-month high in April of 67.3 per cent, Domain Group data showed, pointing to a possible end to the property market downturn.
However, economists were hesitant to say Melbourne’s market had reached the bottom, believing that further interest rate rises, like the one this week, could mean house prices will fall again.
In Balaclava, a two-bedroom house with a bright red kitchen sold to a young couple for $1,447,000. Four other bidders competed at the auction.
The home, at 22 Brunning Street, sold well above its price expectations of $1,275,000 to $1,295,000.
Marshall White Bayside director and auctioneer Matthew Pillios said bidding opened at $1.2 million, and the house sold under the hammer after spirited competition from another 31 bids.
“Seeing five bidders there was great,” Pillios said. Many potential buyers were interested in the property because it was a smaller, single-level home.
“They were saying why would I buy an apartment when I can live somewhere like here,” Pillios said.
Not all homes sold under the hammer, however, with a fixer-upper in West Footscray passing in on a vendor bid of $980,000. That was one of two vendor bids made on the home, with an opening bid of $970,000 kicking off the auction.
No other bids were made on the three-bedroom house at 23 Stanley Street.
The property, which had been owned by the same family for 60 years, did receive an offer post-auction, but it had not been enough to seal the deal, Reside Real Estate director Marty Rankin said.
The home will now be advertised for private sale for $970,000 — the bottom end of the $970,000 to $1.05 million price guide.
Rankin said fixer-uppers needed buyers willing to spend extra to renovate a home, which could be difficult in a market where interest rates continued to rise.
“People are still worried about paying to fix up a home,” Rankin said. “It really depends on the buyer’s appetite for it.”