Industry Focus

REAL ESTATE SERVICES Victorian real estate was still in recovery in the second half of 2013, despite strong price growth and clearance rates, but the market closed the year on a relatively high note overall. "With broader macro-economic conditions like the unemployment rate yet to improve and income growth expected to remain slow, house price growth in 2014 is likely to be more moderate than in 2013," says Enzo Raimondo, CEO of the Real Estate Institute of Victoria (REIV). According to Raimondo, clearance rates in 2013 finished much higher than in the previous year, averaging 71 per cent compared with 61 per cent in 2012. "The last few weeks of the year also saw a record number of auctions, with several consecutive weekends of more than 1000 auctions. This also saw the clearance rate drop below 70 per cent, but it's still higher than the previous year," he says. For the 2014 auction market, Raimondo anticipates demand that continues to support these clearance rates. Campbell Cooney (pictured), Director and Auctioneer at Hodges, says rates differ according to the source and he believes "there are too many that are massaged to suit an agenda". But Hodges—a residential property management and sales franchise that is one of Melbourne's oldest real estate agents, having been established 158 years ago—follows the results regardless, particularly in the areas where it operates (mainly in Bayside, Melbourne). "The clearance rates across Victoria don't necessarily reflect the market because it's really sectionalised from country regions to the city fringe. But, generally speaking, the closer you move towards the city, the higher the clearance rates," Cooney says. As for the year ahead, Cooney points to "the old economic supply-and-demand theory": higher demand where people want to live, and "harder" clearance rates where people are potentially "forced" to live or pushed out further. "So as you move towards the inner city, the city fringe or the suburbs within 10 to 15 kilometres of the city, that's a major auction business," he says. "As you get further out, the auctions start to dry up and they're more private treaty." Supply and demand High demand in city areas will continue to drive growth in the Victorian real estate market in 2014 WORDS: AMAL AWAD 10 Industry Focus

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