August rising for Melbourne auctions

The Melbourne weekend home auction market will begin the final month of winter supported by unequivocally strong results recorded over July

This weekend well over 700 homes will again be offered for auction in Melbourne which is similar to the 776 auctioned last weekends and well ahead again of the 612 auctioned over the same weekend last year.

Melbourne’s west suburban region continues as clearly the most popular area for auction activity with 144 homes listed to go under the hammer this weekend.  Next highest is the inner south with 105 followed by the north east 101, the inner city 92, the inner east 89, the outer east 81, the north 63 and the south east with 55 auctions listed.

East Bentleigh the most popular suburb for auctions this weekend each with 15 listed followed by Reservoir  with 14, Mill Park 13, Port Melbourne 11, Werribee 10, Richmond and East Hawthorn each with 89 and Glenroy with 8 auctions scheduled at the weekend.

The Melbourne home auction market ended July with yet another strong result for sellers with the local market skating through the usually quieter mid-winter auction season

Melbourne reported a clearance rate of 76.2 per cent last Saturday which was higher than the previous weekends 74.9 per cent result and higher again than the 75.7 per cent reported over the same weekend last year.

Melbourne weekend auction clearance rates have averaged 74.8 per cent over July which reflects continuing strong demand for property from mid-year buyers.

Outer suburban areas were again the top performers last  weekend supported by increased activity by first home buyers in the budget market following recent changes to the stamp duty payable by this group.

This week the Reserve Bank met to decide the direction of official interest rates over August with the predictable result that rates will remain at the current 1.5 per cent for the 12th consecutive month. Latest economic data however remains mixed with the ABS national June jobless rate at a four year low but rates in Melbourne and Brisbane increasing sharply over the past year and now over 6.0 per cent.

The ABS June quarter headline inflation result was disappointing increasing by just 0.2 percent over the quarter and up by 1.9 per cent over the year – below the RBA’s notional target range of 2 to 3 per cent. The recent trend of underlying inflation however has improved marginally although remaining at low levels.

The recent surge in the Australian dollar would also concern the RBA following misguided speculation regarding potential increases in local interest rates and being sustained by a lower US dollar. Nonetheless the Reserve Bank is likely to persist with is recent medium-term view of economic activity with rates likely to remain on hold for the rest of the year.

Dr Andrew Wilson is Domain Group Chief Economist Twitter@DocAndrewWilson join on LinkedIn and Facebook at MyHousingMarket.