The Melbourne market has been flipped on its head by soaring building and renovating costs, with new homes flying and those that need work struggling.
A flow on effect hit the buyers of a Mickleham house that sold for a premium price the sellers were chasing yesterday after costs on their next home blew out.
In Glen Waverley, a French provincial mansion topped its reserve by more than $100,000, with an industry player noting “it would cost an insane amount more to build it now”.
An early clearance rate of 58 per cent was recorded from 311 results reported to PropTrack.
Shane and Leonie Aydin ended up earning $770,000 for their “pride and joy” three-bedroom house at 8 Thornaby Drive, Mickleham, that had a $650,000-$700,000 price guide.
The couple splurged almost $50,000 to fit create a hi-tech cinema, but will take that gear with them, with the buyers to use the space as a “normal functioning room”.
Ray White Craigieburn agent Daniel Diamantopoulos passed it in at $720,000 — the top end of the agency’s original price guide — and negotiated a big result for the Aydins.
“They would have happily sold for less, but the costs for their next move have just blown out with the costs of tradespeople and building at the moment just out of control,” he said.
French provincial style is still popular in the east, with the five-bedroom, five-bathroom house at 19 Fraser St topping its reserve by $110,000, Sold By Group director Andy Reid said.
“There was a huge crowd, lots of neighbour interest — it would cost an insane amount more to build it now,” he said.
The property sold for $3.36m off a $2.96m-$3.25m price guide.
Jellis Craig Boroondara auctioneer Simon Lord had his work cut out for him extracting bids for a land value property at 21 Langford St, Surrey Hills, with a guide of $2.5m.
Mr Lord spent half an hour in the rain to get the 789sq m property, with a dated California bungalow on it likely to make way for something new, before it passed in at $2.301m.
Real Estate Institute of Victoria president Richard Simpson said there was “definitely some anxiety in the market around having to renovate” amid runaway build costs.
“It doesn’t surprise me that properties that are unrenovated are struggling a little bit in this environment and stuff that is already fully done up is preferred from people so they can just buy and move in,” he said.
“It’s a little bit interesting as you don’t usually see that, usually people like to renovate and do their own things and they don’t want to have to pay stamp duty on someone else’s renovation they may not like.”
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