Melbourne’s prestige properties still selling despite coronavirus fears

Melbourne’s prestigious inner eastern suburbs have reporting the first price drop since the mid-year market rebound.

92 Page St, Albert Park was sold at auction in March for $9.1m, $1m above reserve.

A string of high-ticket sales in Melbourne’s prestigious inner eastern suburbs were completed last month despite the booming area reporting its first price drop since the mid-year market rebound.

The city’s inner east has continuously recorded strong growth since the market upturn began in July last year. Annualised growth hit 19.8 per cent in the area through March, but the luxury suburbs were not immune from the general market worry relating to the coronavirus pandemic, with prices coming off 0.2 per cent last month.

CoreLogic’s head of residential research, Eliza Owen, said the changes in the top end of the market and the general slowdown in price growth through greater Melbourne to 0.4 per cent may see the capital city become a bellwether for the rest of the country.

“Melbourne, particularly the higher end of the market, is cyclically a leading market.

“So declines we are seeing here could be a signal of what could happen in broad terms over the coming months,” Ms Owen said.

“You could expect the lower end of the market to see an immediate impact. While that is true, it is important to remember that there has also been a significant decline in the sharemarket, which means potentially higher-income households who have those assets may have also lost some buying capacity.”

92 Page St, Albert Park.

One of the directors and auctioneers of Jellis Craig at Stonnington, Andrew Macmillan, said March had been a strong month for the agency, achieving 39 sales with $52m recorded in the last week of the month. Commenting on the prestige market, he said the modest falls in prices were probably due to vendors accepting offers prior to auction.

“A lot of vendors have acknowledged the changing market,” Mr Macmillan said, “Where fair offers have been coming in, vendors have been taking them rather than worrying about the negotiation process.”

Simon Gowling, one of the directors of auctioneers Greg Hocking Holdsworth, managed to convert two of the city's largest sales last month, including the sale of a coveted Albert Park address under the hammer for $9.01m.

The auction of 92 Page Street drew a crowd of more than 100 on March 23, with the home’s unique, vine-covered Victorian facade attracting five registered bidders. The sale of the fully renovated, five-bedroom home was the agency’s last before the federal government’s ban on public auctions and open homes. It was tainted by coronavirus fears, with several buyers telling lead agent Warwick Gardner they had considered holding off due to the pandemic’s economic impact.

Mr Gowling said now was a good time to upgrade in the falling market.

“In the prestige market you are dealing with people who generally have a considerable amount of money. Most, not all, of these people are probably better positioned to weather the storm of things like coronavirus, the banking royal commission or the GFC,” Mr Gowling said.

“So, if the home is special enough, buyers will compete hard.

“This (the outbreak) will hopefully all be over in somewhere between three and six months time but you will be in the home for as long as 30 years.”

Despite the three-bedroom brick home at 20 Fairlie Court, South Yarra begging for a renovation, its enviable position on one of the city’s most sought-after streets with views of the botanic gardens saw it fetch $8m in the latter half of the month.

Jellis Craig Stonnington’s Iain Carmichael sold the home to a local investor.

Another Albert Park property at 36 St Vincent Place North was sold by Mr Gowling and colleague Max Mercuri in a deal believed to be just under $6m.