Hi,
Domain’s preliminary auction clearance rate has been recorded at 56% across 719 auctions. A total of 404 properties sold, 113 were withdrawn, and 202 were passed in. The clearance rate has now consistently remained in the 50% range since the start of March. In comparison, the clearance rate last year was 64%.
As expected, the Reserve Bank of Australia (RBA) raised interest rates by 0.25% to 4.35% because inflation is rising again and is expected to remain high for longer due to ongoing conflict in the Middle East and increases in oil prices.
The Federal Budget is also due to be released tomorrow evening, with rumours swirling that there will be property-related tax changes announced regarding reduced Capital Gains Tax discounts and negative gearing, although the specifics will not be confirmed until tomorrow night.
All these factors have created uncertainty in the property market, and conditions are favouring buyers. Melbourne has now become one of the most affordable capital cities in the country. However, Melbourne could face a worsening housing shortage due to the population continuing to rise and approved development projects not commencing because of uncertainty around building costs. Predictions of a further two rate rises, combined with ongoing global uncertainty, should keep buying conditions as they currently are, which is creating favourable conditions for buyers to enter the market.
Have a great week.
Kim Easterbrook – Managing Director
Hi,
Domain’s preliminary auction clearance rate has been recorded at 59% across 888 auctions. A total of 524 properties sold, 113 were withdrawn, and 251 were passed in. This is still a solid result considering the large volume of auctions held. In comparison to last year, the figures are quite different, with the clearance rate at 70%.
Cotality released its property price data for April, reconfirming that the Melbourne property market is cooling and in a mild downturn. Melbourne’s property prices fell by 0.2% to a median price of $828,249. Houses fell by 0.4% in April to $982,876, while units increased by 0.3% to $644,074.
This is consistent with what we are seeing on the ground, with houses experiencing less demand due to higher price points and affordability constraints. Units, however, are showing resilience due to their relative affordability. Interestingly, annual price growth for houses is 4.0%, compared to 2.0% for units, demonstrating that houses are more stable over the long-term, while units show greater short-term resilience.
While short-term property prices have ‘marginally’ declined, Melbourne’s annual price growth remains positive. The declines are minimal, and the property market has remained relatively stable despite global uncertainty.
This month, more challenges may come into play, with interest rates ‘likely’ to increase by the Reserve Bank of Australia (RBA) tomorrow, and the Federal Government’s 2026-2027 Budget being released next week, which may impact property investors. If changes to tax incentives are announced and come into effect on July 1, we may see a short-term uptick in investor activity until the end of the financial year.
Have a great week.
Kim Easterbrook – Managing Director
Hi,
Domain’s Melbourne auction preliminary clearance rate for last weekend has come in at 56%. Auction numbers were much smaller this week due to Anzac Day on Saturday. 151 auctions were reported to Domain, 85 properties sold, 22 withdrawn and 44 passed in. The clearance rate for the same weekend last year was 62%.
May 12th is the date the 2026-2027 Australian Federal Budget will be delivered and there is a possibility of tax reforms which will target investors. In addition, there be likely more support for first-home buyers and measures to assist increasing housing supply.
Tax items being discussed that are relevant to investors are Capital Gains Tax (CGT) discount changes and negative gearing reforms.
An investor, who has held their property for more than 12 months, is currently able to claim a 50% discount on their capital gains tax. The word is that the federal government is currently looking to decrease this discount to 33%, or even 25%. It is believed that this will only apply to residential investment properties and likely to be grandfathered so existing investors are not affected.
There are also rumours about a reform which may limit the amount of properties an investor owns that can be negatively geared. Also allowing only new builds to be negative geared, capping deductible losses and/or restricting it for higher-income earners are on the discussion table. Again any changes are believed to be grandfathered so existing investors are not affected.
First home buyers may be included and there is a chance that first home buyers may be able to access super for deposits, larger shared equity schemes and larger deposit guarantees.
Any changes that will negatively affect investors will likely result in lower rental supply and therefore increased rents. Melbourne’s rental vacancy rate is currently sitting at a very low 1.4% to 1.8%. The whole purpose of these tax changes is to help increase supply for owner occupiers (and some government revenue raising) and help first buyers enter the market. However, not all renters have the option of living with mum and/or dad whilst they save for a deposit and rents likely rising, it will take longer for buyers to save for their deposit.
The government should be looking at ways to incentivise investors who provide stability to the rental market rather than the ways to detract them from investing. It will be interesting to see what eventuates on May 12.
Have a great week.
Kim Easterbrook – Managing Director
Hi,
Domain’s Melbourne auction preliminary clearance rate for last weekend has come in at 58%. It was a huge auction weekend with 1,172 auctions reported, 676 selling, 97 withdrawn and 399 passed in. The REIV has reported there were an additional 416 private sales. In comparison, the clearance rate for the same weekend last year was 65%.
Cotality released their quarterly property price data which shows that Melbourne property prices have decreased by 0.2% in the Jan to Mar 26 period. This is the fourth month of property price decline with houses declining 1.1% from November last year and units by 0.4% (overall decrease of 0.9%). Whilst these numbers are not demonstrating large property price falls, some of the properties we have purchased over the past six weeks have been upto 10% below last years comparable sales. There are fewer and fewer properties selling well above their advertised property range, in fact, the last three properties I have purchased have been secured for under the bottom of the advertised price range. The current market conditions have allowed some buyers to secure superior properties than what they would have purchased last year.
Also as a result of the current market conditions, there has been an increase in off market activity due to some vendors not willing to spend thousands of dollars on marketing their property with the uncertainty of what their property will sell for.
How long these conditions will last? Of course, no one can answer that, and it is almost certain that we will see an interest rate rise next month which likely extend these conditions for a period of time thereafter. However, we can’t ignore that our population is still increasing and we are not building enough properties to house everyone which is creating pressure. And I do believe, when market sentiment improves, the Melbourne property market will bounce back strongly and buyers will be once again competing strongly to secure properties.
Have a great week.
Kim Easterbrook – Managing Director
Hi,
Whilst generally buyer sentiment is down, Melbourne’s auction clearance rate came in at a solid 59% on a huge auction weekend. A total of 1,324 auctions were reported to Domain, with 780 selling under the hammer, 186 withdrawn, and 358 passed in. I expect this clearance rate to decline once more auction results are reported; however, it does demonstrate the willingness of both buyers and vendors to transact in the current market. In comparison, the same weekend last year resulted in a clearance rate of 63%.
There is no doubt that there is a level of caution in the Melbourne property market, but with so many sales recorded, there is also a sense of people just ‘getting on with it’. This sentiment has come from both buyers and sellers. Buyers are cautious and are factoring in potential future interest rate rises, so run-away results are exceptionally scarce. Additionally, there is no “fear of missing out,” and buyers are willing to walk away from a property rather than overstretching themselves.
Vendors, on the other hand, in some cases are having to reduce their prices to meet the market. Properties that have not sold, generally have had interest from one or two buyers, but some vendors have dug their heels in and were not willing to “meet the market” on the day. Over time, they may need to reduce their prices in order to secure a sale.
Houses that are fully renovated, well located, and have a good floorplan are typically selling in line with comparable sales from last year. However, properties that require renovation, are in poor condition (i.e. knockdowns), or are located on main roads are selling around 5% to 10% below what comparable sales from late last year would suggest.
These are interesting times for the Melbourne property market. However, with 780 properties selling over the weekend and a further 601 private sales reported to the REIV, it does show that buyers and sellers are still willing to transact. In many cases, vendors are having to decrease their prices to get the deal done.
Have a great week.
Kim Easterbrook – Managing Director
Hi,
Another big auction weekend in Melbourne with 1,028 auctions reported to Domain. 609 properties sold under the hammer, 160 were withdrawn and 259 passed-in. The preliminary clearance rate for this weekend is sitting at 59% but will decrease a little after the remaining auction results are reported. The same time last year the clearance rate was 65%. The final Melbourne auction clearance rate for last weekend was 58% which is lower for the same weekend last year at 65%.
The combination of climbing interest rates and the Iranian war has created uncertainty in the Melbourne property market which has resulted in a declining auction clearance rate. The clearance rate is now indicating we are in a more balanced or slightly buyer-leaning market. Whilst this war continues, I am expecting the property market to be patchy and price-sensitive.
After analysing last weekend’s auction results, it really demonstrates where the majority of the buyers current are. The sub $2m property market was very active and if the vendor had realistic price expectations, the properties were selling on the day. Main road properties struggled with many passing-in, which is not unusual when the property market is patchy. The $2m to $5m price point is where things start to get wobbly. A lot more passed-in properties, mostly houses, which makes it a great time if someone was looking to upgrade into a larger home. Interestingly, some big sales last week with two properties in Toorak selling in excess of $10m.
Whilst market conditions are turning to be more favourable to the buyer, there is still genuine interest from buyers willing to transact now, but there is at times a disconnect between vendors price expectations and what buyers are prepared to pay. Even in the active sub $2m market, there weren’t really any ‘run-away’ results as such. Properties appeared to be selling where the comparable sales were suggesting they were worth.
I was successful purchasing a two bedroom, two bathroom, modern villa unit at auction on the weekend in Caulfield East but not without my work cut out. A very competitive auction with 5 bidders with more buyers in the crowd that didn’t put up their hand. However, whilst there was genuine interest, buyers had their limits and were not prepared to stretch past their budgets and the property sold for a price not too far past the vendor’s reserve and for an amount around what the property was actually worth.
Have a great week.
Kim Easterbrook – Managing Director
Hi,
A huge auction weekend in Melbourne with 979 auctions being reported to Domain. 594 selling under the hammer, 263 passing-in and 122 were withdrawn. This resulted in a preliminary clearance rate of 61%, a stronger clearance rate than I was expecting with all the uncertainty in the world and likely interest rate rise tomorrow. The sentiment in the Melbourne property market feels lacklustre which is opening up opportunities for some buyers with eased buying conditions.
The Victorian government has put forward another proposal (in addition to disclosing auction reserves prior to auction) where vendors are now to provide building and pest inspection reports for properties that are being sold. Building and pest inspections typically cost anywhere from $700 to $800 each and are an important part of a buyer due diligence. It is not uncommon for a diligent buyer to pay for two or three building inspections (sometimes more) in their purchasing journey.
The proposed legislation will require a vendor, as part of the vendor’s statement, to provide both a building and pest inspection report which would need to be completed within 3 months before the sale. This is currently legislation in the ACT and commonly provided by the vendor in NSW. Whilst I believe there is good intention with this legislation, I would be very cautious in relying on a report that is paid for, and therefore potentially favourable to the vendor. I would still encourage my clients have a building and pest inspection report produced by our trusted building inspectors who are very experienced and qualified to provide a unbiased opinion.
However, I do believe this legislation will encourage vendors to have more repair works completed prior to putting their properties on the market, and therefore some properties will be coming to market in a better condition than they would have prior. This is proposed for 2027 if the current government is re-elected.
The RBA (Reserve Bank of Australia) are tomorrow, due to announce their next interest rate move with many expecting another interest rate rise. This is due to high inflation, tight jobs market and now the concern of higher energy/fuel prices due to the Iran war. Whilst this potential interest rate rise didn’t seem to affect last weekend’s auction clearance rate, it can only help buying conditions in the immediate future.
Have a great week.
Kim Easterbrook – Managing Director
Hi,
Last weekend was a huge auction weekend in Melbourne with 1,634 properties going under the hammer. A very good test to see how the Melbourne property market is fairing. At this stage, 1,253 auctions have been reported to Domain. 827 properties sold, 147 were withdrawn and 279 passed in. The preliminary clearance rate is 66%. The same weekend last year, the clearance rate was 63% and final clearance rate for last week was 63%. The Melbourne property market is continuining to be stable after last month’s interest rate rise.
The federal government are considering changes to capital gains tax (CGT) concessions on residential property and negative gearing in the upcoming 2026-2027 budget which will be announced in May. The model reduces the CGT discount on investment properties from 50% to 33%. The goal is to raise $5 billion annually. Changes to negative gearing on property are also on the table.
The proposed changes to capital gains tax (CGT) would likely not apply retrospectively and would apply to housing only. For example, on a capital gain of $500,000 made on a residential property that had been held for more than 12 months, would result in an extra $33,000 to $40,000 tax payable (depending on your income).
The proposed changes to negative gearing involve limiting negative gearing tax breaks to a maximum of two investment properties per individual. Less than 10% of property investors have three or more residential properties. The proposal is targeting housing only which means some investors who already have a portfolio of properties, may opt to either buy commercial property rather than residential property, or could look at other ways to buy outside their personal name, whether that be in a company name or self-managed super fund.
These changes are not enough to considerably reduce the amount of residential property investors. But is simply a cash grabbing exercise from the federal government who are looking to recoup billions of dollars annually from all different areas and in no way will help with the issue of housing affordability or supply. If anything, it may result in rents increasing which would make it harder for renters (which will affect many first home buyers making it harder to save for their deposit).
Have a great week.
Kim Easterbrook – Managing Director
Hi,
Melbourne’s first Super Saturday for the year was a good test to see how the property market has reacted to the new year interest rate rise. There were 961 auctions reported to Domain with 635 selling, 231 passing in and 95 withdrawn resulting in a solid clearance rate of 66%. In comparison, the same weekend last year also resulted in a 66% clearance rate.
The property market seems to have bounced back somewhat from the initial interest rate rise shock a few weeks ago which is very much how the property market performed when interest rates were rising in 2022/2023. There was a pause from buyers when the interest rate rise was announced, and then back to a somewhat normal market a week or two thereafter.
We had a busy week last week successfully purchasing properties for five clients and missing out on two properties. All negotiations had competing buyers. The property market is still fast paced with some properties selling before the end of EOI or auction. Numbers at auctions and open for inspections on the weekend were high and the auctions we attended all had active bidding and all sold under the hammer.
An auction result worth mentioning. A huge auction result in Fitzroy North where a former milk bar sold for almost $1,000,000 over reserve. 558 Rae Street, Fitzroy North is an architecturally designed renovated period home on 549 sqm. The 4 bedroom 2 bathroom 1 living with a double garage was quoted $3,900,000 to $4,300,000 prior to auction. Five bidders competing to secure the property and the property had reached it’s reserve at $4,200,000 and sold for $5,100,000.
Have a great week.
Kim Easterbrook – Managing Director
Hi,
Melbourne’s Domain preliminary clearance increased to 68% over the weekend with 613 auctions being reported to Domain, 418 selling under the hammer, 72 withdrawn and 123 passed in. In comparison, the clearance rate for the same time last year was 66%.
The recent interest rate rise doesn’t appear to have put a dampener on Melbourne’s property market. Buyers are still engaged, some cautious but willing to transact. Many buyers had already factored in interest rate rises into their budgets so they are happy to continue on the property purchasing journey.
Interstate investors are still circling. Melbourne’s property prices really haven’t moved for a number of years, especially when comparing to cities like Perth and Brisbane which have experienced strong growth. Whilst Melbourne’s population is still on track to become the most populated city by 2031-2032, many are still viewing Melbourne as a good opportunity to invest in.
The opens for inspections and auctions I attended over the weekend generally had good numbers. The sun was shining, and people were out looking for their future home or investment property. Interestingly, the two auctions I attended, had active bidding from two and three bidders, but both passed-in (didn’t reach the vendor’s reserve price). One sold immediately after, the other didn’t. An auction of a renovated family home on a busy street had well over 100 people watching.
Although there was an initial shock when the interest rate rise was announced, the Melbourne property market seems to be holding up well. The auction clearance rate remains stable and even with the chance of one or two interest rate rises this year, it doesn’t appear to be holding buyers back.
Have a great week.
Kim Easterbrook – Managing Director
