No bubble trouble

Redcourt, 506 Orrong Road, Armadale: the garden before renovation. Redcourt garden now.
Nanjing Night Net

One of the rooms in Redcourt before the renovation.

The Redcourt room now.

There’s no boom, nor a bubble, but Melbourne’s top property agents and commentators are predicting a strong spring selling season ahead.The city faces another big auction day on Saturday with about 900 properties scheduled to go under the hammer. It’s a similar number to last weekend when the clearance rate was 76 per cent, according to the Fairfax-owned Australian Property Monitors.Hocking Stuart chief executive Nigel O’Neil is upbeat. ‘‘We’ve got 110 auctions booked across our network … that’s exciting for early spring.‘‘It’s an alignment of the planets in terms of lower interest rates and two years of pent-up demand.’’His counterpart at Marshall White, John Bongiorno, says many buyers are trying to snap up properties ahead of auction, with offers on seven of his eight properties. But he warns against going overboard: ‘‘There’s talk of a boom market … I don’t think that’s the case.‘‘I think we’re in a strong market but vendors shouldn’t get ahead of themselves.’’APM senior economist, Dr Andrew Wilson, says the market’s on the rise. ‘‘Melbourne’s still a couple of per cent below its previous peak: it’s still playing catch-up but it’s nearly there.’’Prices have jumped beyond previous highs reached in 2010 in most parts of town; it’s just the prestige markets of the inner east and inner south where median prices are still about 7 per cent behind where they were in that period. Though prices in the top-end of town are also rising strongly as buyers chase still-existing value opportunities.The AMP chief economist, Shane Oliver, agrees that things are looking good.‘‘Buyers are returning in force so we think we’ll see a pretty favourable spring,’’ he said. ‘It’s taken a while, but low interest rates have started to work and the impact seems to be coming through, so I suspect we’ll see some fairly solid sales growth.’’Dr Oliver says price growth is running at about 3 to 5 per cent. Dr Wilson is expecting price growth of about 7 per cent growth over the year.Both experts dismiss any talk of a bubble.‘‘Bubbles happen when prices become detached from the underlying fundamentals and take on a life of their own, usually supported by very favourable lending conditions,’’ Dr Oliver said.‘‘Prices have picked up, but growth is quite modest compared with past levels of strength.’’Dr Wilson laughs off the suggestion. ‘We don’t have bubbles in this country … it’s a bandwagon without any wheels.’’One vendor hoping to capitalise on the market’s rising fortunes is the entrepreneur Adam Garrisson. He bought the ultimate renovator’s delight in 2009 – a run-down Queen Anne-style mansion at 506 Orrong Road, Armadale – at a huge discount on the original $8 million asking price and done a no-expense-spared restoration. It had been a home for art and music students in the 1950s, but the government abandoned it in 1996 and vandals had taken over.‘‘For many years I would drive past it once or twice a week … it was hidden away behind padlocked gates and vegetation but I was always intrigued by it,’’ he said, who snapped it up as developers were circling with intentions of turning the once-grand home into 28 bedsits.After reaching a deal, he brought in Shannon Bennett, the chef and owner of Vue de Monde, to design the kitchen; leading fashion designer Akira Isogawa for the Music Room makeover; artist David Bromley for a children’s bedroom and some sculptures.  John Warwicker, of the British design collective Tomato, was responsible for the art throughout the home. It comes complete with tennis court, servants’ quarters coach house and pavillion.Ross Savas, a director at Kay & Burton in South Yarra, has $10 million-plus expectations. ‘‘Someone will fall in love with it without a shadow of a doubt,’’ he says.Mr Garrisson, meanwhile, is looking for his next renovation project. ‘‘My thing is that I want to preserve the integity of old buldings,’’ he says.

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