House for Sale

Let me just say at the outset of this post that there is nothing down under about the real estate market in Melbourne.  While we have found the process of buying a house here to be a fascinating one, we are ever so grateful that we do not need to participate in this red-hot market, currently one of the most expensive in the world.  Properties are sold by auction, meaning the would-be buyer or agent must show up with 10% down payment in hand, ready to bid at the time posted on the for sale board.

A few weeks ago we noticed that a house not far from us had a large, well-lit sign placed in front indicating that it was on the market.  Ross walked down out of curiosity's sake before the auction started, and, along with a couple hundred other people, was able to tour the house just ahead of the auction.  By the time I made it with the camera, the grounds were filled with people,  forcing me to listen from outside the fence.  When the bidding finished, the house was closed off so that the deal could be finalized.

The whole bidding process from start to finish seemed quite short to me, and sounded much like any other auction I have attended.  There were three bidders, one of them an agent in constant telephone contact with his client.  The final price was rather shocking, A$2.65 million.  The increase alone from start to finish was more than our house (a similar size) in Pittsburgh is worth.

I spoke with an acquaintance who recently purchased a house by auction, and she confirmed that it is a nerve-wracking process.  She and her husband had to bid at least twice before they bought their current house.  She explained that you must know exactly what you can afford, and be prepared to pay 10% of the purchase price on the spot.

 

The housing market in Melbourne has clearly not been affected in the least by the recession that has plagued the U.S. and Europe over the past two or three years.  Rentals are hard to find, and we have been told that in Sydney they are so scarce, that would-be renters must bid in much the same way as if they were buying.  

Comments

[Shanda]

Very interesting! It does sound very nerve wracking, but judging by your description it doesn't sound like it deters very many people from trying!

[Shanda]

I noticed signs for a house auction not far from our house just this weekend! It must be a foreclosure. I smiled when I saw the sign, b/c I had just read this post!