Melbourne's real estate auction clearance lowest in three months

The Melbourne weekend auction market slid backwards on Saturday to record its lowest clearance rate for three months.

The capital reported a 77.6 per cent clearance rate – below the 79.2 per cent recorded the previous weekend and just ahead of the 74.3 per cent recorded during the same weekend last year.

Clearance rates below 80 per cent have now been recorded on four consecutive weekends, following 10 weekends through April, May and into June above that benchmark strong market rate. Although the market remains clearly in favour of sellers, it has weakened over the past month as mid-winter has influenced activity.

Auction numbers remain higher than during the same time last year, reflecting continuing confidence in the market by sellers. On Saturday, 630 auctions were listed – ahead of the 556 listed last weekend and well ahead of the 549 listed over the same weekend last year. 

There have been 1727 weekend auctions conducted in Melbourne so far this July, compared with 1485 auctions during the first three weekends of July 2014. Auction numbers will continue to rise sharply over coming weekends as the spring season approaches with well over 700 expected next Saturday.

The ever-popular outer east yet again reported the highest clearance rate at the weekend, with 86.9 per cent, a little on its recent 90 per cent-plus results.

Next highest was the inner east at 84.4 per cent, followed by the north-east at 84.3 per cent, the inner south at 80 per cent, the south-east at 77.8 per cent and the west at 71.7 per cent. The inner city was relatively low again at 71.2 per cent and the north at 65.9 per cent.

Notable sales reported at the weekend included a four-bedroom home at 27 Laburnum Street, Brighton, sold by Nick Johnstone for $3.25 million; a five-bedroom home at 8 Baily Street, Mount Waverley, sold for $2.79 million by JRW Property International; and a four-bedroom home at 29 Fisher Parade, Ascot Vale, sold for $2.55 million by Jellis Craig.

A three-bedroom home at 23 Churchill Street, Doncaster East, was sold for $2.51 million by Assisi P/L Real Estate and another three-bedroom home at 6 Fenton Avenue, Kew, was sold by Nelson Alexander for $2.35 million.

The most expensive property reported sold at auction at the weekend was a five-bedroom home at 15 Glencairn Avenue, Camberwell, sold for $3.35 million by Jellis Craig. The most affordable property reported sold at the weekend was a one-bedroom studio at 45/92 Grey Street, St Kilda, sold for $180,000 by Pride Real Estate.

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

Although the Melbourne mid-winter weekend auction market is showing signs of weakening, the underlying supply and demand drivers will continue to support solid market conditions. Low interest rates are a key dynamic in local housing market activity. 

Latest Australian Bureau of Statistics data shows the Melbourne unemployment rate remained steady at 5.8 per cent over June – the lowest rate recorded for nearly two years. The Melbourne workforce recorded an extra 82,720 jobs during June compared with June 2014.

The ABS also reported a surge in first-home buyer numbers in Victoria over May, with 2465 loans approved to this group for the month. First-home buyer loans have increased by 5.7 per cent during the first five months of this year, compared with the same period last year.

Dr Andrew Wilson is Domain Group senior economist.

Twitter @DocAndrewWilson