‘We had given up on Yarraville’: First home buyers win $955,000 house

A first home buyer couple paid $955,000 for a well-kept family home in Yarraville at auction on Saturday, beating another potential first-time buyer and a young man, as none of the investors who were keen on the home before the budget made a bid.

The three-bedroom deceased estate at 11 Gordon Parade was listed with a price guide of $850,000 to $935,000, and was beautifully maintained with scope to update.

It was one of 890 auctions scheduled in Melbourne this week, the first test of the market after the federal budget unveiled changes to tax concessions on investment properties and supply measures in a bid to boost home ownership.

By evening, Domain Group recorded a preliminary auction clearance rate of 60 per cent from 564 reported results throughout the week, while 83 auctions were withdrawn. Withdrawn auctions are counted as unsold properties when calculating the clearance rate.

The clearance rate is slightly higher than the previous week’s preliminary result of 56 per cent, although both indicate a market that has weakened throughout autumn as buyers adjust to the three cash rate hikes this year.

Onlookers in the crowd of about 30 were reluctant at first, and auctioneer George Alexander of Jas Stephens Real Estate began with a vendor bid of $850,000.

A father bidding for his daughter and her partner offered $860,000, followed by another vendor bid of $870,000.

Two more parties then jumped in, pushing the price well above the $880,000 reserve in quick increments of mostly $10,000 and $5000.

Proceedings slowed at $950,000 – the cap for the federal government’s 5 per cent deposit scheme – before an offer of an extra $1000 was countered by $955,000 and the hammer fell in favour of the father, who embraced the young couple.

“Anything pretty much sub-$1 million where houses don’t need a huge amount of work – this is the perfect example – are getting good demand,” Alexander said.

He had two or three potential investors ask for a rental appraisal before the budget. They did not bid.

“I had a chat with someone this morning, who has now said, ‘Oh, we’ll go and probably go towards a new home,’” he said.

He felt there was some confusion among some investors about the tax changes, but had heard from a couple of people who planned to start looking at new properties.

He said the first home buyer market was good, but more broadly, buyers in the market were cautious and did not want to overpay.

The winning bidders, who did not give their names, liked the home because it was exceptionally clean and well finished.

“What we were looking for was something that was structurally sound and had good bones, and was liveable, but improvements could be made over time,” she said. “We were after something that was a house that looked like a home.”

Her partner added: “We had given up on Yarraville because we didn’t think we would be in the price range.”

Two first home buyer parties battled it out for a well-presented South Melbourne apartment at auction on Saturday, pushing the price to $612,000.

The two-bedroom home at 71/88 Park Street had a price guide of $560,000 to $610,000. It spans 95 square metres of living space in a complex with a swimming pool and gym.

Bidding began with a vendor bid of $575,000, and two parties competed, sending the price above the $600,000 reserve.

A set of first home buyer sisters won, beating a first home buyer young professional couple.

“It was competitive,” Woodards Elsternwick selling agent Sean Rice said. “The market is not too bad … obviously people are holding their breath after the budget being delivered. People are still asking questions about negative gearing.”

He described the market as balanced, saying vendors wanted to sell and buyers wanted to buy.

“I personally find the market still pretty good in respect that the first home buyers are out looking for property.”

Elsewhere, an art deco apartment with a stylish renovation in South Yarra is still available after passing in at auction.

The two-bedroom home at 9/56 Darling Street was listed with a price guide of $800,000 to $880,000.

Marshall White selling agent Jack Martin said there was interest in the crowd but there wasn’t a bid, and after a vendor bid of $800,000, the home passed in.

First home buyers and young professionals had been interested during the campaign, as well as a couple of investors and a couple of people looking for a Melbourne base.

He said the reserve was $865,000 and he would hold another open for inspection on Saturday afternoon.

“People thought the price might have been a bit higher than the advertised range, but our vendors are pretty realistic,” he said.

“There is a lot of noise at the moment with the market. Good properties are still selling; they are just taking a little more time to do so.”

He has been fielding questions about the budget this week. He thought fewer investors would now decide to sell, limiting choice for buyers later in the year.

“For first home buyers, there has still never been a better time to get into the market.”