Lockdown knockdowns: the Melbourne properties that are most popular during inspection bans
When in lockdown, knock down – or so it seems for Melbourne house-hunters desperate to buy property when in-person inspections are banned.
Agents have reported a surge in demand for properties being sold for their land value only, with owners happy to spend millions on houses in exclusive suburbs, sight unseen, because they know they’ll only be knocking them down anyway.
Under current restrictions, in-person inspections and public auctions have been banned and moved entirely online, hitting the usually busy spring market for the second year in a row.
Property listings in Melbourne have fallen by 17.3 per cent over the past four weeks as people wait for the market to open back up – possibly on September 23 – and the clearance rate has also plummeted, falling to 36.7 per cent last weekend, while 390 properties were withdrawn from auction.
But knockdown properties have been as popular as ever, said Kay & Burton South Yarra associate Michael Armstrong, noting it was a trend that had emerged again during this latest lockdown.
He said nearly all of the properties that had hit the market over the past week at his agency were unrenovated or land-value homes ripe for a knock-down and rebuild.
“Those land value numbers set to go to auction, even mid-lockdown, are because of the high confidence they will sell,” Mr Armstrong said.
Prices for houses sold for land value were skyrocketing, he added, with land-value homes selling for as much as a renovated houses under the virtual hammer.
While buyers were looking to build homes in expensive suburbs that better suited their lockdown lifestyles, Mr Armstrong said, they were also looking to avoid the risk of buying a newer property without seeing it face-to-face first.
In-person property inspections in Melbourne won’t be able to go ahead until 70 per cent of people across the state have received at least one dose of a COVID-19 vaccine.
The Victorian Government estimates private inspections will be able to go ahead again from September 23.
35 Spring Street, Sandringham sold to a family looking to rebuild. Photo: Marshall White Bayside
Among the knock-down-rebuild properties sold in some of Melbourne’s most expensive suburbs in recent weeks was a house at 35 Spring Street, Sandringham, that had been owned by five-time squash world champion Sarah Fitz-Gerald. It sold for $2.02 million – $220,000 above the reserve – to a family planning to tear it down and build their dream home.
Another older home, at 15 Pasley Street South, South Yarra, sold for a huge $2.785 million under the virtual hammer after being called on the market at $2.35 million. A family also bought the property wanting to rebuild.
One of the biggest rebuild sales was that of a clinker-brick duplex at 28 Stanley Grove, Canterbury. It sold for a whopping $4.088 million – $788,000 more than when it was called on the market at $3.3 million.
Fletchers Canterbury director and auctioneer Tim Heavyside said the Stanley Grove auction lasted for an hour and 40 minutes, with 152 bids being made during an intense battle to buy the property.
“The person who bought it was an Australian citizen living overseas – they had no intention of looking at the property in person,” Mr Heavyside said.
28 Stanley Grove, Canterbury sold for $4.088 million to an expatriate looking to knock it down and build their dream home. Photo: Fletchers Canterbury
Marshall White Stonnington director and auctioneer John Bongiorno, who sold the South Yarra home just last weekend, said the lockdown had little effect on those looking for a knockdown project.
15 Pasley Street South, South Yarra Photo: Marshall White Stonnington
“Buying land is a longer process in any case, but lockdown doesn’t have that much impact on that market – a lot of people just want to get on with it,” Mr Bongiorno said.
Home-builders like Metricon have noticed the surge in demand for knockdowns from their end.
“The market is absolutely on fire,” Metricon Victorian general manager of sales Drew Glascott said. “We’ve seen a big increase in the number of people inquiring and going ahead with knockdown-rebuilds.
“It’s up by between 15 per cent and 20 per cent during the lockdown period compared to a normal market,” he said. “People are stuck at home and wanting to renovate or rebuild and, with interest rates so low, they just take that loan and go for it.”
Buyers’ agent Cate Bakos warned that buyers still needed to do their proper due diligence, even if they weren’t planning on inspecting the home.
That included looking at whether the land was covered by overlays, and speaking to architects or other planning professionals about building after a teardown and any pitfalls they may face before buying.
“It’s not a low-risk thing. It’s not quick and council approval is not guaranteed,” Ms Bakos said.
Originally published as: Lockdown knockdowns: the Melbourne properties that are most popular during inspection bans