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 A total of 1,324 auctions were reported to Domain, with 780 selling under the hammer, 186 withdrawn, and 358 passed in.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