Richmond investment property sells for $1.22m, down $220,000 from six years ago

A well-presented Richmond investment property sold at a loss in post-auction negotiations on Saturday, and traded below its published reserve price.

A first home buying couple paid $1.22 million for the bright, freestanding three-bedroom house at 71 Cutter Street, which has timber floors, an outdoor dining area and off-street parking.

The Richmond home last sold in 2020 for $1.44 million, records show, and has since been advertised for rent.

The property was one of 714 scheduled to go to auction in Melbourne last week. By Saturday evening, Domain recorded a preliminary auction clearance rate of 56 per cent from 506 reported results throughout the week, while 79 auctions were withdrawn. Withdrawn auctions are counted as unsold properties when calculating the clearance rate.

The weekend was the first since the September interest rate rise, and since new laws were introduced around the disclosure of sale prices, comparable sales and reserve prices. A two-week grace period means only some reserves were disclosed this weekend, but all auctions from October 16 must have their reserves published a week prior.

The Richmond property was listed for sale with a price guide of $1.2 million to $1.3 million, which was updated to a published reserve of $1.3 million, then a published reserve of $1.25 million.

Proceedings began with a vendor bid of $1.2 million. BigginScott Richmond selling agent Edward Hobbs had expected two bidders, but one did not bid.

A young couple placed a bid of $1.21 million, but with no further offers, the home passed in. It sold in negotiations for $1.22 million.

“An extra $10,000, short settlement, and the owners were happy to wrap it up,” Hobbs said.

He said the buyers had been looking since January.

“They bought it pretty well. I thought it might at least get the reserve. They understand there is some affordability out there,” he said.

Hobbs said he had fielded strong attendance at open homes, and that buyers didn’t bring up interest rates with him this weekend.

He backed the new rules around reserve price disclosure. “I like the transparency. I may have had one in 100 [auctions] where the owners have given us a reserve that is not what we were thinking and it has shocked us,” Hobbs said.

Elsewhere, a renovation opportunity in Brunswick West is still available, for an asking price of $1.05 million.

The three-bedroom house on a 440-square-metre block at 2 Temple Street was listed with a price guide of $1 million to $1.1 million.

A vendor bid of $1 million was placed, but with no more offers, the home passed in.

The reserve price was $1.05 million and the property is now listed for sale at that price.

Three parties showed interest post-auction, Ray White Brunswick selling agent Matthew Schroeder said.

“We have got a few people that are interested, there is just a bit of trepidation from buyers at the moment, especially with properties that need a lot of work,” he said.

Schroeder said the heritage facade made the home unsuitable for developers, and it couldn’t be rented. The home had been in one family for six decades and the vendor moved out some years ago. Potential buyers have included parents and adult children.

“It looks like they are using a bit of funding from the bank of mum and dad to buy something of that land size and do the work themselves,” he said.

Schroeder said interest rates were being discussed by both buyers and sellers as the buyers’ borrowing power diminished.

“Yes, the rates are higher but it is probably the most competitive market for buyers we have seen in over a decade,” he said.

In Mickleham, in Melbourne’s outer northern suburbs, a stylish new build is still available after passing in on a bid of $543,000.

The three-bedroom house at 45 Cassia Way features a Mediterranean-inspired curved facade of pale bricks and arched windows. It was listed with price hopes of $500,000 to $550,000.

Two first home buyers competed: a solo buyer and a young couple.

Bidding began at $530,000 and rose in mostly $2500 increments to $542,500.

After one more $500 bid, the property passed in. The reserve price was $579,000 and the sellers are builders.

“Traditionally, the first home buyer market never missed a beat in all sorts of cycles we have been through,” AMS Real Estate selling agent Omar Morsi said.

“This is the first time we have experienced that first home buyers are becoming bothered by the current state of the market. A lot of the conversations are around fears that values could come down.”

PRD chief economist Dr Diaswati Mardiasmo said some buyers might have tried to purchase this weekend before interest rates climbed higher, as some economists forecast a November hike.

“If there’s another cash rate hike in November, it does mean their borrowing power will lessen,” she said.

“[Buyers think], ‘We need to get in now before our borrowing power is less, and it’s going to be higher interest rates, and we’re ready now, let’s do it now’.”