Hot Melbourne property market strengthens despite pre-grand final auction surge

Melbourne’s early spring auction market maintained its recent strong performance, despite the usual pre-grand final surge in listings.

Melbourne reported a clearance rate of 79.6 per cent on Saturday, which was just ahead of the 79.5 per cent reported over the previous weekend and significantly higher than the 73.3 per cent recorded over the same weekend last year.

The Melbourne clearance rate has now increased over three consecutive weekends, with the rising market also producing remarkably consistent results over August and September. The lowest clearance rate in that period was 77.5 per cent, recorded on September 3.

Desperate buyers were offered some short-term relief at the weekend with a significant increase in the number of homes for sale, as sellers avoided a clash with the distraction of the grand final next Saturday.

There were 950 auctions on Saturday, a big jump from last weekend’s 793, but well down on the 1101 on the same pre-grand final weekend last year. Just over 40 homes will go under the hammer in Melbourne next weekend.

The consistency of Melbourne’s recent auction market is reflected by the performance of the suburban regions, with strong results in most areas. A little more than 5 per cent separated the top and bottom regions at the weekend, with the outer east back on top with an 82.9 per cent rate.

The next highest was the northeast with 82.7 per cent and the highest number of sales at 115, followed by the inner south with 82.1 per cent, the west with 79.7 per cent, the inner west with 79.1 per cent, the north with 78.8 per cent, the south-east with 78 per cent and the inner city with a clearance rate of 77.6 per cent.

Notable sales reported at the weekend included:

• a four-bedroom home at 107 Mont Albert Road, Canterbury, sold by Jellis Craig for $4 million;
• a four-bedroom home at 15 Howitt Street, Glen Iris, sold for $3.01 million by Kay and Burton;
• a four-bedroom home at 51 Princess Street, Kew, sold for $2.46 million by Marshall White;
• a four-bedroom home at 27 Metung Street, Balwyn, sold for $2.41 million by Fletchers;
• a three-bedroom home at 35 Champion Street, Brighton, sold by Nick Johnstone for $2.32 million.

The most expensive property reported sold at auction was a five-bedroom home at 167 Clarke Street, Northcote, which sold for $4.3 million by McGrath Northcote. The most affordable property reported sold at the weekend was a one-bedroom unit at 1/164 Leamington Street, Reservoir sold for $216,000.

For a list of auction Melbourne results click here.

Melbourne recorded a median auction price of $748,000 on Saturday, which was lower than the $865,000 reported last weekend and 1 per cent lower than the $751,000 recorded over the same weekend last year. A total of $415.1 million was reported sold at auction in Melbourne at the weekend.

The pre-grand final super Saturday of auctions signals the end of Melbourne’s early spring selling season. The local market has certainly started on the front foot with consistently high and rising clearance rates. This is in sharp contrast to the year before, when the market was fading fast under the burden of higher mortgage rates and producing significantly lower results.

Melbourne sellers are likely to be increasingly attracted to the best spring selling conditions in years, with strong competition among buyers for available homes in all areas. Prices are certainly likely to continue to rise in the Melbourne market, with low mortgage rates a catalyst for buyer confidence.

The Reserve Bank of Australia will gather for its regular monthly meeting next week to determine the direction of official interest rates over the next month. The RBA will likely continue to take a wait and see approach on rates following the recent cuts, and will be focusing on the critical September quarter inflation data to be released by the Australian Bureau of Statistics on October 26.

The bank will also be wary about emerging signs of a resurgence in house prices growth in the hot Melbourne and Sydney spring markets.

Dr Andrew Wilson is Domain Group chief economist Twitter@DocAndrewWilson join on LinkedIn