Buyers purchase homes in Thomastown, North Melbourne, Fitzroy North after budget’s property investor tax changes
A first-home buyer paid $740,000 for a Thomastown home at auction Saturday after interested investors dropped out of the race.
The three-bedroom family home at 2 Gunbower Close was a rental property and records show it was last advertised for $460 per week in January 2024.
It was one of 890 auctions scheduled in Melbourne last week; It was the market’s first test after the federal budget announced changes to tax concessions and procurement measures on investment property in a bid to boost home ownership.
As of Saturday evening, Domain Group had recorded a pre-auction approval rate of 60 percent from 564 results reported during the week, while 83 auctions had been withdrawn. Withdrawn auctions are counted as unsold properties when calculating the liquidation rate.
The Thomastown home attracted the first three batches of home buyers to bid at the auction.
“We had a lot of investors interested and since the budget could no longer negatively impact established properties, that’s why they dropped [out]“We had to sell to a property owner who had vacant possession,” said Harcourts Rata & Co sales agent Mario Tucci.
The property is listed with a price guide of $690,000 to $759,000, and Tucci said it “definitely needs to work” for the outcome.
Trading continued to stall, first at $690,000, then at $710,000, and then at $735,000, at which point he negotiated with the highest bidder.
The sale price of $740,000 was also the reserve price. Records show the home last sold in 2021 for $738,500.
Tucci sold another house in the same suburb and won $710,000 in the contest in which the first two home buyers participated.
The four-bedroom home at 2 Glebe Place was listed with a guide of $700,000 to $770,000, then changed online to $700,000.
Bidding started at $650,000 and the price exceeded the seller’s reserve of $690,000.
“The market is really tough. There’s no doubt it’s a tough market, but if you’re a good agent you’ll get deals done. There are just fewer buyers,” he said.
“The reserve price is really critical for suppliers to be realistic about reserves.”
Elsewhere, a flat in North Melbourne was flipped and sold to a first home buyer in post-auction negotiations for $682,500.
The two-bedroom, ground-floor home with a grassy courtyard and entertaining terrace at 2/60 O’Shanassy Street is priced between $650,000 and $700,000.
Transactions began with the seller’s offer of $650,000, and the first home buyer countered with an offer of $655,000. Since there were no other offers, the house was delivered.
The reserve was $700,000.
Lucas Mills Real Estate sales agent Mark Hutcheson said good properties in good locations still sell well.
“Obviously it’s a very price-sensitive market,” he said. “The market tells you pretty quickly whether you’re in line or not.”
He said that investors have been silent in the region for a long time and although it was still early last week, he did not see this change.
Elsewhere, local growers paid $2,526,000 for an architecturally designed house in Fitzroy North at an auction on Friday.
The three- to four-bedroom home at 28 Newry Street was listed with a price guide of $2.1 million to $2.2 million, but received a pre-auction bid of $2.4 million, which another party was willing to counter.
Selling agent Charles Atkins of Jellis Craig Fitzroy said two young professional couples were competing at auction, attracted by the space, design and light of the property.
Although an official reserve has not yet been determined, the offer of $2.4 million was at a level that sellers could easily sell. Since he is a musician, they are growing up to have more space for family and music production.
Buyers are also upgrading. “They’re Fitzroy North people, so it’s a big place but they live relatively close. They love the area and the lifestyle it brings,” he said.
“The market is a bit unstable at the moment, but quality homes that make a difference, well-designed, high levels of finish are well received by the market.”
LJ Hooker head of research Mathew Tiller said Melbourne’s 60 per cent clearance rate was a “good result”.
“We say prices above 60 percent are rising, prices below 60 percent are probably a little soft,” he said.
“That means there are still buyers in the market, people are going out to auction and bidding.”
Elizabeth Redman is national property editor of The Age and The Sydney Morning Herald.Connect with: X or email.
