Strong Melbourne auction market favourable for all regions

The Melbourne home auction market reported another strong result at the weekend, with buyer activity continuing to track at the highest winter levels since 2009. 

Melbourne recorded an 80 per cent clearance rate on Saturday, just above the 79 per cent recorded the previous weekend and again ahead of the 75 per cent rate of the same weekend in 2014. The weekend result was the third consecutive Saturday increase in the clearance rate, with the market reporting remarkably consistent outcomes over the past month.

Unseasonably high auction numbers have provided no barrier to the August revival as confident sellers continue to flood the late-winter market. In total, 785 homes were listed for auction at the weekend, which – although down on last weekend’s all-time record August offering of 950 auctions – was again well ahead of the 625 conducted during the same weekend in 2014.

Reflecting Melbourne’s consistent overall auction clearance rate over August, suburban regions are now producing more consistent comparative results, reflecting an even spread of strong buyer activity through price ranges, buyer types and locations.  

Melbourne’s outer east again reported the highest regional clearance rate on Saturday, with an 83.1 per cent result, followed by the west with 82.7 per cent, the inner city and the north-east each with 81.4 per cent, the inner east 80.9 per cent, the south-east with 80.6 per cent and the inner south and the north each with 76.4 per cent. 

Notable sales reported at the weekend included a four-bedroom home at 37 Lynch Crescent, Brighton, sold for $3.3 million by Buxton; a three-bedroom home at 32 Hawksburn Road, South Yarra, sold by Kay and Burton for $3 million; a five-bedroom home at 62 The Highway, Mount Waverley, sold for $2,935,000 by Ray White Glen Waverley; a three-bedroom home at 41 Fisher Parade, Ascot Vale, sold by Brad Teal for $2,605,000; and a five-bedroom home at 18 Yeneda Street, Balwyn North, sold by Fletchers for $2.6 million. 

The most expensive property reported sold at auction at the weekend was a four-bedroom home at 95 Rowell Avenue, Camberwell, sold for $3.2 million by Noel Jones. The most affordable property reported sold at the weekend was a one-bedroom unit at 2/8 Walnut Street, Carnegie, sold for $235,000 by Biggin and Scott.

• Melbourne weekend auction results

Rising auction clearance rates over the past month resulted in rising home auction prices, with the median trend auction price increasing from $753,938 last Saturday to $772,375 this Saturday. Although more higher-priced properties are entering the market and influencing price growth, Melbourne’s latest weekend trend auction price remains 11.3 per cent higher than the $693,938 recorded over the same Saturday in 2014.

Increased investor activity is a driver of rising clearance rates in the Melbourne market. Latest Australian Bureau of Statistics data reports that residential investor finance to the value of $3.857 billion was approved in Victoria over June. This was just below the all-time monthly record of $3.865 billion recorded over the previous month.

Investor finance approved in Victoria for housing increased by 28.3 per cent over the first six months of this year compared with the same period last year. Investors now account for 51.4 per cent of all residential lending in Victoria, with activity from this group tracking at record market share levels this year. 

An improving local economy has also been a key driver of increased overall housing market activity in Melbourne this year. Latest ABS data, however, reports that the Melbourne July jobless rate increased sharply from 5.8 per cent to 6.5 per cent over the month to be just below the 6.6 per cent reported over July last year. Despite the rise in the jobless rate, the number of Melbourne employed has increased by 62,300 over the past year.

Dr Andrew Wilson is Domain Group senior economist.

Twitter: @DocAndrewWilson