Hi,

This weekend, Domain’s preliminary clearance rate remained stable at 58% across 658 reported auctions. Of these, 359 properties sold at auction, 122 were withdrawn and 177 were passed in. By comparison, the clearance rate for the same weekend last year was 68%. The REIV also reported an additional 428 private sales.

Winter has well and truly arrived, and with the school holidays only two weeks away, we are approaching what is traditionally a quieter period in the property market. Stock levels are expected to decline, and some buyers are sitting on their hands due to ongoing uncertainty. However, it is interesting to note that clearance rates have remained stable and the volume of private sales continues to be relatively strong.

Buyers are cautious, but the Melbourne property market is showing signs of resilience. In total, almost 800 properties across Melbourne changed hands last week. While there is no doubt that some vendors are having to adjust their price expectations to secure a sale, the market remains active.

At the time of writing, it appears that a ceasefire agreement has been reached between the US and Iran, and hopefully it remains in place. Oil prices have already started to ease, which should help alleviate inflationary pressures. Even before this development, there had been growing discussion that interest rates may have reached their peak, and we are expecting to hear tomorrow that rates will remain on hold.

It does raise the question: have we reached the bottom of the property market?

Unfortunately, we only know we’ve reached the bottom once it has already passed. What we do know is that quality properties continue to perform well. Almost every property we have been negotiating on has involved competition from other buyers. The market remains price sensitive, with buyers taking a cautious approach. That said, some buyers have been able to secure better quality properties than they could have at the same time last year.

The unknown is how long these market conditions will continue. For buyers who are well prepared and ready to act, periods of uncertainty can often present opportunities that are not available in stronger markets.

Have a great week.

Kim Easterbrook – Managing Director