Autumn arrives with Melbourne home auction market still solid

The Melbourne weekend auction market has started autumn confidently, recording another robust overall result for sellers in most areas.

Clearance rates continue to track at their highest since winter last year, but stern challenges remain – a mountain of Saturday listings is set to deluge the market in a fortnight.

Low interest rates are a key catalyst of continuing solid housing market activity with the Reserve Bank deciding last week to again leave rates on hold over March.

Rates have now been steady at the record low 2 per cent for 10 consecutive months although the prospect remains for a near term cut. 

But the recent intensification of the political debate around proposed changes to property taxes – particularly negative gearing by investors – may have an impact on buyer and seller sentiment, with concern persisting about predictions of sharply falling house prices.

Melbourne reported a clearance rate of 75.8 per cent on Saturday, up from the 75.3 per cent recorded the previous weekend and also higher than the 74.9 per cent recorded at the same weekend last year.

Last year’s results, however, were affected by typically low numbers of auctions conducted over the Labour Day holiday weekend, which this year is next weekend.

There were 1152 homes listed to go under the hammer on Saturday – just below the previous weekend’s 1212 offerings. 

Regional auction results were again remarkably consistent with the inner city the only rate below 70 per cent.

The top performer was the south east with 82.7 per cent, followed by the north east at 78.7 per cent, the inner south at 78.6 per cent, the inner east at 78.5 per cent and the north at 76.4 per cent.

Lagging behind was the west with a clearance rate of 76.2 per cent, followed by the outer east at 71.2 per cent and the inner city at 68.9 per cent.

Notable sales reported at the weekend included a five bedroom home at 91 Woodland Street Essendon sold for $3,400,000 by Brad Teal/Unique Estates as well as a four bedroom home at 80 Wellington Street St Kilda, which was sold by Wilson Agents for  $3,300,000.

Another four bedroom home at 166 Finch Street Glen Iris sold for $3,266,000 by Abercromby’s Real Estate, while a five bedroom home at 27 Union Street Armadale was sold by Jellis Craig for $3,110,000.

The most expensive property reported sold at auction at the weekend was a five bedroom home at 4 Kerferd Street Malvern East which sold for $4,680,000 by Abercromby’s Real Estate.

A total of $481.3 million was reported sold at auction in Melbourne at the weekend.

Recent economic data has been disappointing with the ABS national unemployment rate back up to 6 per cent, wages growth the lowest on record and the confirmation that the peak of the home building boom has clearly passed.

A sustained period of unemployment above 6 per cent will likely motivate the Bank to cut rates in an attempt to stimulate an increasingly lifeless economy.  

Next Saturday the market will pause over the holiday weekend with significantly lower numbers of auctions to be conducted. 

The following weekend however is set to present the local market with its greatest ever autumn challenge with 1500 auctions likely on the pre-Easter Super Saturday – and also set to be the second highest day of auctions in Melbourne’s history.

Full weekend weekend auction results.

Follow Dr Andrew Wilson, Domain Group Chief Economist, on Twitter: @DocAndrewWilson