By Herron Todd White
November 2020

Introduction

Melbourne auction volumes remain low and although have slightly increased recently, current volumes are only approximately six per cent of the activity experienced this time last year – around 974 auctions during this period in 2019 (source: Corelogic, 2020). During the last week of September, there were a total of 60 auctions held across Melbourne, 13 of which were sold prior to auction and only one sold on the auction date. The remaining properties were either withdrawn or passed in, highlighting the reluctance to trade property during the city’s Stage 4 COVID restrictions.

With the all-around market activity decreasing, it doesn’t come as a surprise that prestige properties showcasing envy-inducing features and hefty price tags are also facing a slowed market movement. The inability of agents to perform physical inspections for prospective buyers throughout August and September would obviously deter sales, as such a large amount of faith has been placed in virtual walk-throughs and auctions for multi-million dollar purchases.

Melbourne CBD

Amid the economic uncertainty and lockdown environment, the property market in the Melbourne CBD continues to feel the pandemic pinch. According to the latest market report, the volume of prime sales has declined by 25 per cent compared to the first quarter and average days on market for prime property in Melbourne increased from 86 days to 90 days in the June quarter. Moreover, COVID restrictions have redirected buyers’ minds on their priorities and lifestyle. Along with the decline in international migration, we expect the housing market in the Melbourne CBD to remain stalled in the near future. Compared to last year, the volume of prime property sales has dropped significantly. Highlighted below are the city centre’s highest priced transactions to date and highest current listings on the market.

23 Guildford Lane, Melbourne was the highest priced house sale in 2020, selling for $2.815 million in February. This luxurious townhouse features three bedrooms, two bathrooms and parking for two cars and is located in the heart of Melbourne’s CBD within a short distance of Melbourne Central, Emporium, RMIT University and Queen Victoria Market. This four-level residence offers three bedrooms, two bathrooms and a private double garage. This property spent only 39 days on the market and is currently leased for $1000 per week.

The highest selling apartment was 12/181 Franklin Street, Melbourne. This property was sold in August through an online auction for $1.68 million, which was $330,000 above the reserve price. The apartment offers over 170 square metres of internal area with two oversized double bedrooms, two bathrooms, an upper mezzanine work-from-home space, large laundry and wine store.

Currently, the highest priced listing is an apartment located at 292/299 Queen Street, Melbourne, with an asking price of $3.75 million. The vendor purchased this property for $4.25 million in May 2019. Located in Republic Tower, the apartment was personally designed by Nonda Katsalidis and offers 350 square metres of unsurpassed living with two bedrooms, two bathrooms and two car parking spaces. The property has been listed on the market since May 2020.

South East

Amid the COVID crisis, the prestige property market in the south-eastern suburbs, particularly in the bayside suburbs, is more resilient compared to Melbourne CBD. Due to the current COVID restrictions and remote working environment, purchasers are focusing on the lifestyle features the area and the property have to offer. We have seen some evidence of increases in the value of prestige property in bayside suburbs. A house

The vendor purchased the property for $5.5 million in October 2018 and sold for $5.95 million in June 2020 after 42 days on the market. This exceptional architect-designed, three-level residence on 769 square metres of land offers four bedrooms plus home office and 5.5 bathrooms with an underground six-car garage and an auto-clean 25 metre lap pool. This property is located in the heart of Hampton with close proximity to the Brighton Beach precinct, beachfront, Hampton Street shops, restaurants and transport and prestigious South Road schools. The highest priced sale for a unit or apartment was 13/786 Esplanade, Mornington with three bedrooms, two bathrooms and two car spaces. The property sold for $2.55 million in July 2020 after five months on the market. This designer penthouse apartment is situated in a landmark location of seaside Mornington, just a short stroll to the beachfront and Mornington’s boutique shops, restaurants and cafes.

5 Denistoun Avenue, Mount Eliza is currently the highest priced listing in the south-east area. Brought to the market as Mount Eliza’s most expensive listing to date, the property has been listed on the market since October 2019 with an asking price of $7 million to $7.7 million. This property is an award-winning, architectdesigned residence sitting on an exclusive cliff-top location with direct access to Daveys Bay beach and spectacular views of Port Phillip Bay and coastline. The property features seven bedrooms, six bathrooms and three-car parking across a substantial 2,806 square metres of land.

Inner and Outer East

Prices remain resilient and on an upward trend in Melbourne’s eastern suburbs, with LGA areas including Boroondara, Manningham, Whitehorse, Knox, Banyule and Maroondah showing median prices ranging from $991,250 to $2.3 million for four-bedroom houses in Quarter 2 of 2020 (Propertydata, 2020). Despite the unprecedented year, there have been some notable prestige sales in the inner east of the city.

13 Wimba Avenue, Kew sold for an eye-watering $7.9 million in March 2020, boasting six bedrooms and six bathrooms across three lift-accessible levels on 918 square metres of land. The property features northern sunlight and range views and a Hampton’s inspired summer room that opens to a large pool and alfresco area. To add to the marble and oak textures used, the property includes a basement-level theatre, billiards room, gym and cellar, along with a six-car garage.

The substantial property sales aren’t only limited to houses on large sites in some of Melbourne’s most affluent neighbourhoods. Luxurious units, townhouses and apartments built with wellappointed finishes, highly desirable features and clever design also fetch prices much higher than the median prices seen in the eastern corridor.

A city-facing, ground level unit at G02/8 Main Drive, Kew sold off-the-plan in August 2020 for $2.15 million (subject to confirmation). The residence will comprise three bedrooms and two bathrooms and feature natural stone and timber surfaces throughout its kitchen, bathroom and ensuite as well as an abundance of brushed chrome finishes. It also features a study nook, outdoor entertainment area and space to park two cars. The property is one of 17 residences in the Oakwood development in Kew, located on a tree-lined boulevard, approximately 15 minutes drive from the CBD.

Inner and Outer North

It seems a distant memory, but the property market entered 2020 with much anticipation and optimism coming off a strong end to 2019. The auction results at the start of the year are in complete contrast to the past few months in Victoria. There were 1123 auctions on 22 February compared to just 33 on 12 October, highlighting the change in market conditions since the start of the year (source: Corelogic,2020).

That being said, properties have still been selling albeit not in the numbers recorded prior to the Coronavirus pandemic. The decrease in number of listings has resulted in less prestige properties hitting the market but that lack of stock has also helped to keep prices steady with buyers fighting over the limited number of properties.

Homes in the inner northern suburbs of Melbourne are well known for their timeless Victorian period architecture. 16 Rushall Crescent, Fitzroy North is no exception. This property sold for $3.675 million on 15 June. This house has four bedrooms, two bathrooms and one car space. The front of the house has been restored with period fixtures and features moving into a rear extension which ties in modern and state of the art designs. The sale occurred between the first and second lockdowns with a high number of potential buyers resulting in a sale in 21 days. The sale showed that the market was still achieving good results in uncertain times mainly due to the lack of stock and the number of willing and able buyers remaining active in the market.

One of the more unique sales in the inner northern suburbs was 69 Fitzgibbon Street, Parkville. This 1889 heritage registered polychrome brick building was and still is the Parkville post office. The property includes five bedrooms, one bathroom and three car spaces. The post office still operates on a lease worth almost $31,000 annually.

The building marketed as a once in a lifetime opportunity saw high interest initially and sold in 30 days for $4.04 million on 22 February. The historical significance, late 1800s neo gothic architecture and the fact that it still operates as a post office certainly makes this one of the more unique sales in Victoria during 2020.

A new prestige listing further north at 252 Woodland Street, Strathmore, is currently listed on the market and asking for between $4.25 million and $4.55 million. This ultra-modern home has four bedrooms, three bathrooms and a seven-car basement carpark. The open floor plan and combination of large indoor and outdoor entertaining spaces accompanied by high end fixtures and fittings will be sure to gain interest in a market which is still seeing low numbers of stock due to the Coronavirus lockdowns.

Western Suburbs

Western Melbourne’s higher end property can be found right in the heart of its inner western suburbs such as Moonee Ponds, Essendon, Ascot Vale, Altona North, Yarraville and Williamstown. The housing market for high end property has seen a decrease in volume this year compared to 2019 with COVID being a major factor. The majority of sales for prestige properties in this area occurred at the start of the year prior to the start of the pandemic and any form of restrictions being put in place. With a crippled economy and very uncertain times for many people, the demand or desire for lavish homes from both investors and owner-occupiers took a decline. This was combined with a limited number of buyers as no overseas investors were allowed into the country due to the heavy travel restrictions in place since March.

Supply for high end property has not been as prevalent this year as in the past however we may see more properties being listed in the coming months. One reason is that people cannot physically inspect properties at this point in time so sellers have held off placing their properties on the market until restrictions are lifted and potential buyers are allowed to physically inspect again in an attempt to achieve a higher sale price. Another reason could be that if people are now finding that they can no longer afford to pay their mortgage due to the pandemic’s effect, there will be a flood of supply of higher end properties in an effort to avoid the bank taking the property as a mortgagee in possession. Overall there has been little change in value for this type of property as there has been no volume. The market is dominated by owner-occupiers leaving very little rental spaces available. With no investors the market for high entry real estate has been devoured by homeowners.

One sale that stands out in this area is 9 Forbes Street in Essendon which sold for $3.61 million in June this year. The four-bedroom, three-bathroom, four-car garage house was originally built in the 1920s. Keeping its original facade, an extension took place in 2016. The house features a pool, large open living areas and American oak floorboards.

On the market for a price of $2.99 million is 5 Morton Street in Essendon. Among the fourbedroom, three-bathroom luxurious home’s features are an underground garage for six cars, large fitting room and master ensuite, indoor and outdoor entertaining area, home theatre, pool and elevator. The home was listed in August this year.

Perron King
Director

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