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auction weekend in Melbourne with 1,028 auctions reported to Domain.  609 properties sold under the hammer, 160 were withdrawn and 259 passed-in.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