Wait and see: Sellers still pause before putting homes on the market in Melbourne

Melbourne sellers are waiting to see where the market goes, as the preliminary auction clearance rate sits just below 70 per cent after a cold, but successful weekend.

Agents and auctioneers are reporting much lower new stock levels on the market, meaning the competition for properties has become fiercer.

Domain economist Trent Wiltshire said Melbourne’s preliminary auction clearance rate of 69 per cent was a sign Melbourne’s auction market was more buoyant.

“Clearance rates over recent weeks are now at the highest point in over a year, so activity has definitely picked up,” Mr Wiltshire said.

“I would also note that the number of auctions is about 30 per cent lower than this time last year, so the market isn’t being tested that much yet with lots of new supply.

“There’s more buyer interest and activity, with lower interest rates a key driver and if clearance rates do stay at about 60-65 per cent, it’s likely we’ll see prices bottom-out later this year,” Mr Wiltshire said.

Partner with Kay & Burton South Yarra Michael Armstrong said vendors were still watching before coming back to the market.

“People are still being very measured – it’s all about getting their timing right,” he said.

He said more buyers were back in the market, and, with the June-July school holidays just around the corner, many were buying before the break.

A three-bedroom, two-bathroom home at 31 Disraeli Street, Kew, passed in, before selling for $1.8 million in negotiations after the auction.

Selling Agent with Kay & Burton Hawthorn Sophie Su said the buyer was a young family with two sons at nearby Trinity Grammar.

About 40 people attended the auction, with the property initially passing in on a bid of $1,755,000.

A warehouse conversion at 2A Frederick Street, Windsor, also passed in before selling in a negotiation after the auction for an undisclosed price.

Armstrong said the two-bedroom, two-bathroom property was snapped up by a downsizer wanting the Windsor lifestyle.

A bid of $1.9 million by the downsizer was rejected, but it was sold to them for an undisclosed price after negotiation.

A downsizer was also the buyer of an apartment at 2/34 Tivoli Road, South Yarra, which sold under the hammer for $1,265,000.

The auction of the two-bedroom, two-bathroom apartment attracted about 60 people, with five bidders, according to Kay & Burton chairman Gerald Delany.

“It was a good crowd, a bit like the old days,” Delany said with a laugh.

Biggin & Scott Richmond director Russell Cambridge agreed, saying the crowds were giving agents “a spring in their step”.

“It is like the old days,” Cambridge said.

Two properties in Richmond sold above expectations with one at 90 Neptune Street selling for $197,500 above reserve for $1,297,500.

The three-bedroom, two-bathroom Victorian-style home was bought by a young couple who will live in it.

The other property, at 215 Highett Street, sold for $920,000, well above the $850,000 reserve. Cambridge said the rundown home was bought by investors who were looking to fix it up and rent it .

Cambridge said the results showed lack of stock was pushing up prices.

“Buyers are frustrated because they don’t have a lot to choose from,” he said. “We definitely need sellers out there.”

Crowds were also big at the cheaper end of the Melbourne market with several homes and apartments selling to first-home buyers and downsizers.

Buyer’s agent Frank Valentic said there were several bidders at properties including 4/24 Leopold Street, South Yarra, which was sold through Hocking Stuart South Yarra.

The two-bedroom art deco apartment sold to a downsizer for $875,000. It had previously sold in 2017 for $767,000.

“It shows vendors are not getting as much growth from these types of properties as they used to,” Valentic said.

First-home buyers were the winners of the keys to 6/245 Hotham Street, Ripponlea, sold via Hodges Caulfield.

The tiny, one-bedroom, one-bathroom property saw two bidders fight it out. The property sold under the hammer for $315,000, $7000 above the price guide.

First-home buyers also bought 7/15 Egerton Road, Armadale, after it passed in without a bid. The property, through Hocking Stuart Armadale, later sold after negotiation for $500,000.