Low stock no help to sales

Melbourne’s auction market has posted its weakest performance in three months, with the clearance rate hitting a new low, despite the number of properties going under the hammer falling by nearly half.

The Real Estate Institute of Victoria reports the clearance rate was 58 per cent for the 455 auction results collected so far. The outcome of another 103 auctions have not been reported.

In the month before Easter, an average of 60 per cent of properties sold despite 800 to 960 properties being on offer each weekend. “Any thought that the lower volume would see an improvement in the clearance rate has not come to pass,” REIV spokesman Robert Larocca said.

The weak performance also comes as new figures show that flagging buyer demand is now clearly affecting prices.

Australian Property Monitors, which is owned by Fairfax, reports that Melbourne’s median house price showed no growth in the three months to March. Unit prices dropped 1.4 per cent. In contrast, RP Data-Rismark estimates the drop in median values was 1.8 per cent for both houses and units over the same period.

Including these latest figures, three of the four major analyst/industry groups who monitor the Melbourne market have now confirmed that property values were flat or falling in the March quarter.

Taken with the notable decline in demand for housing loans and the weakening clearance rate, a fairly persuasive argument can be made that Melbourne’s market, much like the rest of the country, is heading towards a downturn.

Meanwhile, in yesterday’s auction market, the top-floor, two-bedroom unit at 17/49a Kensington Road in South Yarra sold for $740,000 after being declared on the market at $600,000 by Bennison Mackinnon. More than 100 people watched as four bidders continued to fight it out above $620,000.

“I don’t care what happens to the property market in Melbourne, with those [types of properties] you can’t go wrong,” said buyer’s advocate Greg Sinclair, of Greg Sinclair Property.

“These large, solid brick 1960s, 1970s and 1980s apartments in the best streets of South Yarra, East Melbourne, Prahran, Windsor, East Hawthorn — anywhere within 5 kilometres as the crow flies of the CBD — are bulletproof.”

Nearby in Prahran, the single-fronted timber Victorian at 2 Bowen Street attracted strong interest from five bidders and sold for $903,000. Elite Buyer Advocates said the two-bedroom house was declared on the market at $875,000. Hocking Stuart quoted it at $800,000-$860,000.

Only one genuine bid of $640,000 was received for 34 Kidman Street in Yarraville, with the four-bedroom house passing in on a vendor bid of $660,000. Barry Plant said the property, which was quoted at $630,000-$690,000, sold through later negotiations for $685,000.

A two-way competition developed over 85 Rennie Street in Thornbury, which opened at $820,000 but sold for $945,000. Michael Ramsay Property said the renovated, five-bedroom Californian bungalow was declared on the market at $937,500. Nelson Alexander quoted it at $840,000-$920,000.

An investor paid $477,500 for the modern two-bedroom townhouse at 5 Mavis Street in Footscray. Purchased for $340,000 in early 2008, the price rose about 40 per cent (or by $137,500) in about three years, according to Australian Property Monitors. Jas H Stephens quoted the property at $430,000-$470,000.

In Brighton, the double-fronted Victorian at 8 Loller Street didn’t attract a single genuine bid despite drawing a crowd about 200 people.

“(The auctioneer) opened on a vendor bid of $1.2 million and tried, I would say, for 20 minutes to get someone else to bid, but in the end he put in another vendor bid of $1.25 million,” said Catherine Cashmore of JPP Buyer Advocates. The three-bedroom property, which Buxton quoted at $1.15 million-$1.3 million, ultimately passed in. The reserve is $1.36 million.

The three-bedroom townhouse at 40 Ardoch Street in Essendon, quoted at $670,000 to $730,000, passed in on a vendor bid of $670,000. Nelson Alexander is offering the property for private sale at $729,500.

There are 610 auctions scheduled next weekend.

cvedelago@theage.com.au Twitter: @chrisvedelago