Melbourne auction market slips in spring after record winter

The auction clearance rate tracked backwards last weekend but the local market remains on track for a solid to strong spring selling season. 

Melbourne recorded a 76.3 per cent clearance rate on Saturday, down from the 79.1 per cent recorded the previous weekend and lower than the 79.4 per cent rate of the same weekend last year.  

Relatively high numbers of auctions continue to be a feature of the auction activity, reflecting seller confidence in local market conditions.

In total, 878 homes were listed to go under the hammer on Saturday, which, although below the 1046 listed the previous weekend, was again significantly higher than the 715 conducted over the same weekend last year. 

A record number of winter auctions were conducted, with 9532 homes going under the hammer. The highest clearance rate since the winter of 2009, at 76.7 per cent, produced an all-time record number of 7137 winter auction sales in Melbourne.

Auction numbers will continue to rise through September with well over 1000 homes listed next weekend with the season’s first Super Saturday set for the pre-Grand Final weekend.

The outer east regained its usual top spot as the leading suburban region at the weekend, with a clearance rate of 85.4 per cent.

Next best was the west with yet another strong clearance rate, at 81.5 per cent, reflecting that regions recent surge in buyer activity.

The inner south reported the highest number of auction sales at 99 from a clearance rate of 79.8 per cent followed by the north-east 79.5 per cent, the south-east 71.9 per cent, the inner east lower this week with 71.6 per cent, the inner city at 70.5 per cent and the north with a clearance rate of 69.8 per cent.

Notable sales reported at the weekend included a four-bedroom home at 45 Wentworth Avenue, Canterbury, sold for $3.36 million by Jellis Craig, another four-bedroom home at 8 Elm Grove, Brighton, sold for $3,185,000 by Marshall White, a four-bedroom home at 386 Beach Road, Beaumaris, sold by Ray White Beaumaris for $2,925,000, a three-bedroom home at 13 Moody Street, Balwyn North, sold for $2.91 million by Jellis Craig, and a four-bedroom home at 2 Gray Street, Brighton, sold for $2.75 million by Buxton. 

The most expensive property reported sold at auction at the weekend was a six-bedroom home at 8 McEvoy Street, Kew, sold for $4.2 million by Castran Gilbert. The most affordable property reported sold at the weekend was a three-bedroom home at 44 Main Street, Bacchus Marsh, sold for $252,000 by First National Rayner.

For a list of weekend auction results in Melbourne, click here.

Auction prices weakened slightly at the weekend, with Saturday’s monthly median trend auction price of $797,250 down from the $802,000 recorded the previous Saturday. Melbourne’s latest weekend trend auction price, however, remains 9.1 per cent higher than the $730,750 recorded over the same Saturday last year. 

Although the Reserve Bank has unsurprisingly decided to leave official interest rates on hold over September, the chances of another rate cut this year have recently increased. 

Rising unemployment and growing concerns over the prospects for the global economy – particularly China – may activate the Reserve Bank to act to stimulate the local economy, particularly as the bank has conceded that underlying growth may now be lower than previously forecast.

Latest ABS data reporting near-flat GDP growth during the June quarter reinforces rising pessimism over the future direction of the Australian economy and a downward bias for interest rates. A sharp fall in the Australian dollar last week is a positive, however, for Australia’s export-oriented industries.

Dr Andrew Wilson is Domain Group Senior Economist