Balwyn falling
Balwyn falling, yes it is. House prices are certainly falling and they have done so very quickly in Balwyn.
I believe that last weekend there were around 31 auctions in Balwyn and only 6 houses sold. This is a major change in buyer sentiment. Back in April 2015, land could achieve around $3000 per square metre for premium plots in Balwyn. In October, local selling agents were citing $2500 per square metre for allotments around 1,000 square metres of land should be achievable.
On the final auction weekend of November 2015, some allotments sold for around $2100 to $2200 per square metres and buyers were present but not bidding. We attended several auctions and if one buyer bid, they got the full attention of the sales team.
A good example of the growth the market in Balwyn was achieving is the sale of 58 Metung Street, Balwyn. The block is reportedly 650 square metres of land and sold at auction in April for what was considered a huge price of $1,950,000 or $3000 per square metre. Then, can you imagine, this modest allotment resold with another agent in August for $2,281,000. That is 17% capital growth in 4 months. (data source REIV propertydata.com.au)
But what about right now?
Balwyn, in my professional opinion has fallen around 10% minimum in a month. The brakes have been “slammed” on in the Balwyn market recently. Land is now more like $2200 per square metre, if you can sell at all. Vendors are struggling to keep pace with the speed of the change in market conditions. Agents are working hard to monitor the changing attitude to value and to advise Vendors on reserve adjustments and asking prices for sales in Balwyn.
Why is this happening? Chinese money is uncertain at the moment in the face of changes to FIRB rules and Chinese policy to money leaving its country. So despite the dollar being low in comparison to Chinese currency, the confidence is not there to transact at the moment. Will this change again in 2016? I cannot say.
Is this good for local buyers who have been priced out of the market earlier in 2015. Yes it could be. Buyer Solutions advice is to call us now if you want to activate your buying plans and do not delay.
Will this flow onto other suburbs? Other areas such as Mount Waverley, Waverley, Bentleigh and traditionally other areas where Chinese buyers love to settle could also be negatively impacted. We will watch closely in coming months.
For up to date information on what’s happening in real estate in Melbourne, contact Janet at jspencer@buyersolutions.com.au or 0418 101 146.
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