Tide starting to turn
COULD the pendulum in the real estate market finally be swinging away from investors and back to homebuyers?
There was a time not too long ago when homebuyers were being priced out of many auctions by investors, armed with equity and bank managers willing to deal.
But the Australian Prudential Regulation Authority started putting the brakes on the investor market earlier this year, directing banks to limit their exposure to that sector of the market.
As a result the major banks have increased interest rates on investment loans.
WBP Property chief executive Greville Pabst believes the tighter lending requirements for investors has seen the tide turn in favour of owner-occupier homebuyers.
“It’s no secret homebuyers outnumber investors, but until now many homebuyers couldn’t compete with the deep pockets of investors fuelled by record low interest rates,” Mr Pabst said.
He said homebuyer demand was strongest for entry-level houses and apartments, blocks with development potential, family homes and properties in locations close to amenities.
While homebuyers are starting to get a better run at the auction market, analysis of results reported to CoreLogic RP Data last week show an even spread of market performance across the city.
CoreLogic RP Data recorded a preliminary clearance rate of 78 per cent from 856 reported auctions last weekend.
Melbourne’s outer east region continued to lead the way, with a clearance rate of 86.4 per cent from 59 reported auctions. All other regions posted clearance rates in the 70 per cent range.
The south east was the next strongest region, with a clearance rate of 78.5 per cent.
Among the successes was the four-bedroom period home at 2 Davies St, Brighton East, which sold under the hammer for $1.59 million.
Hodges, Brighton, agent Russ Enticott, said the family that bought the house on a 630sq m block was among four bidders at the auction.
His office also scored a $1.61 million sale at 7 Murrumbeena Cres, Murrumbeena.
An opening bid of $1.3 million was made for the fourbedroom house that the owners bought four years ago for $980,000.
A family snapped up 2 Davies St, Brighton East, at auction last weekend for $1.59 million.