Chill wind blows through Melbourne auction market on Election Day

The typically subdued Melbourne mid-winter home auction market will be enhanced this weekend with buyers and sellers distracted by Federal Election Day and the beginning of school holidays.  

Fewer than 200 homes are likely to go under the hammer on Saturday, which will be well below last weekend’s strong June offering of 901 and the 550 auctioned over the same weekend last year. 

Saturday’s auction numbers will also be well below the 422 listed over the last Federal Election Day on Saturday 7 September 2013.

Melbourne’s west is again the most popular region for auctions this weekend with 46 listed followed by the north 35, the north east 32, the inner city 21, the inner south 18, the south east 15, the outer east 12 and the inner east just 11 auctions listed.

Craigieburn will host the highest number of suburban auctions on Saturday with 10, followed by Reservoir six, Mill Park five, Sunshine West and Maribyrnong each four and Bundoora, Brunswick and Preston with three auctions each scheduled at the weekend.

The Melbourne weekend home auction market recorded its second consecutive year-low result last Saturday, with the typical mid-winter freeze in buyer and seller activity now clearly looming.

Melbourne reported a clearance rate of 71.7 per cent last weekend, which was just below the 71.8 per cent recorded over the previous weekend and again well below the 79.6 per cent reported over the same weekend last year. 

High June auction numbers and the beginning of some school holidays likely contributed to the lower result and it is highly unlikely the turmoil on markets to due to the Brexit vote result had – or will have – any influence on market outcomes. 

Underlying demand for housing remains strong in Melbourne with latest Australian Bureau of Statistics data reporting total net migration into Victoria of 73,581 over 2015. This was 10.2 per cent higher than 2014, the highest annual total for the state since 2008 and clearly the highest of all the states.

Auction activity in Melbourne will typically track backwards over July with the usual mid-winter hiatus set to subdue the market. The local market however remains well positioned for an early spring revival driven by low and falling interest rates.

Although the Reserve Bank remains unlikely to cut official rates at its regular monthly meeting next week despite concerns in some quarters over Brexit – a cut sooner rather than later remains on the cards.

Dr Andrew Wilson is Domain Group’s chief economist

Twitter @DocAndrewWilson