The Melbourne property market continued through the third weekend of spring with a preliminary Domain auction clearance rate of 57% from 913 scheduled auctions. Of the 659 results reported, 374 properties sold, 80 were withdrawn and 205 passed in. The REIV also recorded 461 private sales across Victoria. Auction volumes were higher ahead of the AFL Grand Final long weekend, when fewer auctions are traditionally held. In comparison, the clearance rate for the same weekend last year was 71%.
Melbourne is increasingly operating as a two-speed market. Good quality properties in desirable locations that are presented, marketed and priced correctly are continuing to attract competition. In comparison, properties with compromises or unrealistic vendor expectations are generally taking longer to sell, with buyers carefully assessing value and showing little urgency unless the property and price are right.
The contrasting auction results over the weekend demonstrated this clearly. At 54 Croydon Road, Surrey Hills, three bidders competed for the property, which was declared on the market at $1.985 million and sold under the hammer for $2.105 million. By comparison, 1 Arkaringa Crescent, Black Rock, received no bids and was passed in. The four bedroom home is now for private sale with an asking price of $2.3 million to $2.375 million. These results show that buyers are still prepared to compete when they see value, while other properties can struggle to attract a single bid.
Attention will now turn to the Reserve Bank’s next interest rate decision on 29 September, with all four major banks forecasting a further 0.25 percentage-point increase. Another rise would place additional pressure on mortgage repayments and borrowing capacity and may cause some buyers to reduce their budgets while others will likely delay their purchasing decisions. However, the impact is unlikely to be consistent across the market, with scarce, high-quality properties expected to continue outperforming those with compromises.
At the same time, new home sales in Victoria fell by 27% over the three months to August, the largest decline recorded by any Australian state. While higher interest rates may weaken buyer demand in the short term, reduced construction activity risks placing further pressure on Melbourne’s underlying housing shortage. For financially prepared buyers, the current two-speed market is creating opportunities, but the weekend’s results show that competition can still be strong when a good property is priced appropriately and marketed well.
