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 It was a huge auction weekend with 1,172 auctions reported, 676 selling, 97 withdrawn and 399 passed in.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
