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In the REIV September Quarter Property Update, you can read about median prices for Melbourne, Geelong, Ballarat and Bendigo. The median prices of both houses and units in most suburbs are available at reiv.com.au.

In some cases, the median price will have increased and in others, it will have decreased. But to understand what the results mean, it is important to understand what a median is.

The median is not the average. The median value is the middle price in a series of sales, where half of the sales are of lower value and half are of higher value. For example, if 15 sales are recorded in a suburb and arranged in order from lowest to highest value, the eighth sale price is the median price.

Median prices are used rather than average prices because median prices are unaffected by a few unusually high or low prices, making them more accurate.

If your suburb does not appear on the list, it may be because of insufficient sales or because the area is not an official suburb.

The institute collects the results of about 70 per cent of all residential property sales in the quarter and publishes the suburb-by-suburb results where we believe the sample is an accurate reflection of the sales activity.

When there are fewer than 30 sales in a quarter but it is a reasonable sample, the result carries an asterix to explain there are enough sales to make it statistically reliable.

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There’s no let-up in the exodus as tree-changers continue to eye greener pastures, reports David Adams.

The quest for a more relaxed lifestyle in the wide outdoors continues to draw people out of Melbourne and into rural Victoria.

Since it was first identified as a trend in the late ’90s and early noughties, the tree-change phenomenon has continued to gather pace and while the global financial crisis has led to some slowing in numbers moving out to places further afield, leafy destinations in close proximity to the city remain popular among those looking to escape the rat race.

Bernard Salt, a KPMG property advisory services partner and author of The Big Shift, says many of the established tree-change destinations are continuing to gather momentum.

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“If you look at the common denominators, these are places generally within an hour of the urban fringe, maybe two hours from Melbourne,” he says.

Popular tree-change destinations in Victoria — similar to those elsewhere in Australia — share a range of characteristics. “They are always green and pleasant and undulating — no one tree-changes to a dry, flat, wheatbelt town,” Mr Salt says. “They are always pretty places … and they often also have some sort of historical character. The absolute maraschino cherry on top is that there’s some sort of celebrity connection to the town, like Mel Gibson has a farm down the road.”

In Victoria, popular destinations for tree-changers continue to include areas such as Maldon, Creswick and Castlemaine in the Goldfields, as far north as Echuca on the Murray River and, to the north-east, communities such as Kilmore and Seymour, Alexandra and Walhalla.

South-east of Melbourne, destinations include a stretch from Pakenham to Drouin, while to the west, in-demand locations include Inverleigh and Bacchus Marsh, as well as Ceres and Bannockburn, which are just outside Geelong.

“Bannockburn is one that has gone gangbusters,” Mr Salt says.

Seka Powell, a director at ResCom in Bannockburn, says the company has just had the best three months she’s seen in a decade, fuelled by the opening of the Geelong bypass a couple of years ago, which has significantly cut travel times to Melbourne’s West Gate Bridge.

“[And] it’s just 15 minutes into Geelong and 40 minutes to Ballarat, or you can shoot over the ring road and get down to the coast very easily.”

One-acre (0.4 hectare) blocks are available for about $170,000, while half-acre (0.2 hectares) blocks are about $150,000. Established homes can go for anything from the low $300,000s up to the mid-$600,000s. “If you compare it to Geelong, you’re certainly getting more bang for your dollar, no doubt,” Ms Powell says.

While the tree-change movement was sparked by retirees, Mr Salt says the trend has moved beyond them.

“I think we’re now getting people aged in their late 30s, early 40s — Generation Xers — who just don’t buy into the inner-city lifestyle … and are prepared to make different choices.

“So, [it's] a new, younger, generation of people who are prepared to trade down their high-flying job in the city and take something a little less well paid but trade up in the quality of the environment.”

Addressing the suggestion that a significant number of tree-changers have been moving back to the city, Mr Salt says that while it may be happening in certain cases, “for all the people coming back, there must be more people going in the other direction because the numbers keep growing every year”.

“The numbers in places such as Bannockburn, Daylesford, Echuca and the Goldfields just continue to grow.”

In Echuca — the closest Murray River community to Melbourne — Stephen Tonkin, a director of LJ Hooker, says the global financial crisis did have an effect on the number of tree-changers willing to buy at the higher end of the market ($500,000-plus).

But he adds that there remains a “good feed” of buyers from Melbourne. These include people who are buying lifestyle properties along the Murray River to live in immediately, as well as those who are buying low-maintenance properties to let to holidaymakers for a few years before moving in themselves after their retirement.

“I have sold a number of higher-end properties to people who intend to move here in about five years,” Mr Tonkin says.

LJ Hooker offices in northern Victoria recently launched an online magazine specifically aimed at selling to tree-changers.

Over in Daylesford, real estate agent John Evans says the relative affordability of properties and its close proximity to Melbourne remain key factors in drawing people to the area.

“You can buy a fairly substantial property here for the price of a terrace in Fitzroy … You can set yourself up in a pretty reasonable [three-bedroom] property here for the low to mid-$400,000s.”

Blocks of land are still selling for $130,000 to $140,000.

Mr Evans adds that the concept of telecommuting is helping to fuel demand from tree-changers.

“With the advances in technology helping them, they don’t really have to go into the office as much, do they?” he says.

“In the past, they used to call them ‘weekday widows’ — they’d shift to the country and dad would go back to the city to work Monday to Friday and come back on the weekends. But now mum or dad can stay — depending on who the working partner is — the whole week because they can work from home. I just think that opportunity is available to them more than it was a few years back.”

While it’s true most tree-changers move within an hour or two of the city, there are those who are attracted further afield. But Mark Norling, the principal at Elders in Bairnsdale, says there was certainly a marked downturn in the numbers making the move to inland locations around Bairnsdale and Sale when the global financial crisis hit. He adds that the tightening financial situation has seen some tree-changers forced to return to Melbourne in search of work.

That said, he says the company is still selling eight-hectare and 40-hectare lifestyle properties to tree-changers preparing for a move down the track.

“They’re buying them, paying them off and then they’re going to build a house and retire up here.”

Mr Salt, meanwhile, sees no indication that the tree-change phenomenon won’t continue for the foreseeable future.

“The lure of the bush — the lifestyle — is incredibly powerful, whether in fact it’s the tree-change or the sea-change option.

“We are a lifestyle-driven people, you only have to look at our demography to see that. We love the beach and, increasingly, we love these ‘cutie-pie’ little towns within striking distance of Melbourne. [They] just keep on growing, year in, year out.”

Earning a crust in a tiny town

David Cummins made the move from Melbourne to the small community of Chewton, just outside Castlemaine, about two years ago.

As a conveyancer who had previously lived in Northcote for 20 years, he decided to make the move — along with his mother and a family friend — after seeing some of his clients successfully do so.

“Primarily, we needed the business to be able to operate within an hour of the city,” he says. “We needed all the services like broadband, phone services and overnight express post … that kind of thing.”

They subsequently moved into Chewton’s former bakery and have renovated it to provide them with three separate residences, as well as an office from where he now works.

While his clients are still based in the Northcote area, Mr Cummins says he’s had to return to Melbourne for work less often than he had expected.

“It’s all emails, fax correspondence and phone calls, anyway.”

Mr Cummins says he should have made the move years ago and adds that he’s moved not just for the peace and quiet but for the chance to have a change of lifestyle. “It’s fairly relaxed,” he adds

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New figures show that private sales are increasingly pipping auctions at the post.

Melbourne’s property market has put in a decidedly lacklustre performance over the last quarter, with the city’s median house and unit prices dragged down by growing weakness at the top end.

The Real Estate Institute of Victoria reports the median metropolitan house price rose just 0.9 per cent to $565,000 in the three months to September. The median apartment/unit price increased by 0.3 per cent to $470,000.

The REIV data shows that the top quarter of the market experienced price falls of 0.6 per cent for houses and 0.8 per cent for units.

At the very top end, representing the most expensive 5 per cent of properties in the city, the drop in prices was recorded as 5.7 per cent for houses and 2 per cent for units.

Interestingly, one new trend highlighted in the data is the declining importance of auctions, which have long been the engine of price growth for the city.

‘‘The median price for properties sold by auction actually declined by 1.5 per cent in September, while the median price for those sold by private sale increased by 4 per cent,’’ said REIV
spokesman Robert Larocca.

‘‘It’s a sign that the market is now being driven by the more affordable and middle sectors of the market rather than by the upper levels of the market, which are where most auctions are concentrated.’’

But it was a trend that was hard to pinpoint yesterday, when there were some strong sales results in the higher price brackets.

The auction clearance rate was 67 per cent for the 601 properties that were available for sale, according to the REIV. (The results of 105 auctions were not reported.)

In Glen Iris, five bidders pushed the sale price of 26 Summerhill Road to $2.3 million -$450,000 over its reserve.

Hocking Stuart had quoted the six bedroom 1910 period house at $1.7 million to $1.9 million.

The auction of 1/35 Stewart Street in Ormond didn’t really heat up until the three-bedroom townhouse was declared on the market at $831,000. Two bidders had been responsible for getting it to that level from an opening at $750,000 but four new parties then jumped in and the property eventually sold for $997,000.

A three-bedroom Californian bungalowat 2 ElNidoGrove in Carnegie attracted three bidders and sold under the hammer for $842,500 off a reserve of $780,000. Buxton quoted the property at $750,000-plus.

There was a similarly strong result for 21 Bessazile Avenue in Forest Hill, a three bedroom 1960s house that hit its reserve at $735,000 but sold for $801,000. Ray White said five bidders made a play for the property, which had been quoted in the high-$600,000 to low-$700,000 range.

At the top end, a two-storey Victorian terrace at 100 Victoria Avenue in Albert Park sold for $3.27 million after being declared on the market at $3 million. Hocking Stuart had quoted it at $2.7 million to $2.8 million.

But vendors certainly didn’t get it all their own way yesterday.

In Prahran, a double-fronted Victorian at 65 Greville Street passed in without a whisper and is yet to be sold. ‘‘If someone asked me what is the most saleable style of house in Melbourne
I would say a double-fronted Victorian home with a northern aspect at the back and off-street parking, and that’s what that house had,’’ said buyer’s advocate Michael Ramsay.

The property opened and passed in on a vendor bid of $1.4 million without one raised hand from a crowd of about 60 people. ‘‘A house like that in good times would have five bidders but today it couldn’t attract one. [It] would normally be absolutely bulletproof,’’ Mr Ramsay said.

RT Edgar, which quoted the property at $1.4 million-plus, said negotiations were under way. The story was much the same nearby at 6A Aberdeen Road in Prahran, where a three-bedroom townhouse opened and passed in on a vendor bid of $850,000. The reserve is $895,000.

There are 1170 auctions scheduled next weekend, the highest number of properties available on a single weekend sinceMarch 2008.

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Melbourne property prices experienced another month of near zero growth in August, with the market putting in its second weakest performance of the year.

Analyst Residex reported that Melbourne house values rose just 0.33 per cent last month (apartment values fell1.03 per cent).

That was only marginally better than the 0.27 per cent growth in house values recorded in May, when the  market was commonly said to have ‘‘turned’’ after Anzac Day.

Residex chief executive John Edwards said Melbourne’s market peaked in April when the growth rate hit 3.2 per cent in a single month, declining steadily but not uniformly since then.

‘‘[The results] are not saying that the market is dreadful. Melbourne is just quieting; the rate of price growth isdefinitely slowing,’’ Mr Edwards said.

There was a strong level of demand witnessed in yesterday’s auction market as a surge of stock hit the market ahead of next week’s lull for the AFL grand final.

The Real Estate Institute of Victoria said that 72 per cent of the 607 properties up for auction this week were sold.

After tracking down a large number of unreported auction results from last Saturday, the REIV has downgraded last weekend’s clearance rate from 70 per cent  to 67 per cent.

The outcome of 132 auctions from yesterday are still unknown, which may affect this week’s clearance rate as well.

In Footscray, the vendors of 2 Dawson Avenue saw the value of their double fronted weatherboard house rise
$200,000 in just over three years.

The three-bedroom property was bought for $411,000 in May 2007 and sold yesterday through Jas H Stephens for $611,000. It was quoted at $540,000 to $590,000 and declared on the market at $585,000.

A first home buyer beat an investor and two other would-be buyers at the fall of the hammer on  2/460  Middleborough Road in Blackburn. The double-storey, two-bedroom villa unit sold for $485,000 after hitting its reserve at $440,000.

Ray White quoted the property at more than $400,000.

The two-bedroom villa unit at 4/2-4 Simpson Street in Kew, one of a set of five, sold yesterday for $627,500 after being declared on the market at $620,000.

It was quoted at $500,000 to $550,000. Janet Spencer of Buyer Solutions, who was the under-bidder on the property, said a similar but unrenovated unit in the same set sold for $590,500 in August.

In Elwood, a two-way competition developed over 14 Ruskin Street after Hocking Stuart opened the auction of the three-bedroom Edwardian with a vendor bid of $1.05 million.

Declared on the market at $1.17 million, the property sold for $1.2 million after receiving about 25 bids. It was quoted at $1.05 to $1.15 million.

Six bidders fought over 1/42 Union Street in Brighton East, a renovated 1960s villa unit that sold for  $650,000.

Hodges said that two bidders went tit-for-tat at the auction after the property was declared on the market at $600,000. It was quoted at $490,000 to $550,000.

The three-bedroom unit at 1/32 Loller Street in Brighton attracted enough genuine interest to open at $700,000 and rise to $750,000 before passing in.

ResCom Real Estate said a later offer of $765,000 was received but the reserve was $830,000.

In Armadale, the six-bedroom house at 28 Seymour Avenue passed in at $3.25 million after attracting just one
genuine bid, according to buyer’s advocate Michael Ramsay.Marshall White, who quoted the property at $3.5 million-plus, sold the property through after-auction negotiations but the price was undisclosed.

Elsewhere at the top end, the five bedroom house at 23 Bevan Street in Balwyn also sold through after-auction
negotiations for $3.48 million. JPP Buyer Advocates said it attracted only one genuine bid at $3.15 million before passing in.

Jellis Craig had quoted it at $3.3 to $3.6 million.

Meanwhile, the latest update on the Consumer Affairs Victoria inspection operation staged lastweek is that the regulator found only some minor ‘‘technical breaches’’ by agents at the 30 auctions they observed, instead of  the 100 auctions reported by MarketWrap last week. 

‘‘The vast majority of the auctions visited were all conducted in the correct manner,’’ CAV director Dr Claire  Noone said.

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The share of debt-free households in Australia has plunged to a nine-year low, new figures show, amid signs people are borrowing heavily to keep pace with the rapid growth in house prices.

According to a Melbourne Institute survey, only 36.2 per cent of households held no debt in the September quarter, the lowest since the series began in 2001.

With the ratio of household debt to disposable income at record levels, the figures have raised concerns that a growing number of consumers are living beyond their means.

Amid a debate over whether the country is in the grip of a property bubble, the survey also found the proportion of people who own their home outright had reached a five-year low of 37.5 per cent.

A research fellow at the Melbourne Institute, Edda Claus, said the high debt was ”worrying”, and households’ financial position had worsened in the quarter.

”The big danger would be if people lost their jobs. If they’re very highly indebted then things can go very bad very fast,” she said.

While a sharp fall in employment looks unlikely, separate figures from the Reserve Bank show the ratio of household debt to disposable income hit 159 per cent in the June quarter, the highest on record. The main reason is higher mortgage debt.

With economists tipping about 1.25 percentage points in interest rate rises by the end of next year, the most highly geared households could be vulnerable to a sharp increase in their repayments.

A senior economist at JP Morgan, Helen Kevans, said it appeared households were ”releveraging” to keep up with rising house prices.

”During the crisis there was little evidence that households actually deleveraged. Because we’ve taken on so much debt over the last few years then households are becoming much more sensitive to changes in interest rates,” she said.

Despite the increased debt concerns, Dr Claus said the strong labour market meant household debt was a potential problem rather than a pressing one.

”As long as people keep their jobs, it should be OK,” she said.

The latest prediction of an imminent interest rate rise came yesterday from CommBank’s chief economist, Michael Blythe.

He forecast a 0.25 percentage point move next month. Markets are betting there is a 60 per cent chance of such a move.