Melbourne auction market returns with form after Cup weekend break

The strong Melbourne auction market resumes this weekend with a significant lift in listings following last weekend’s holiday break for the Melbourne Cup.

Over 800 homes are scheduled to go under the hammer, which is predictably well ahead of the 483 auctioned last weekend, well behind the 1071 listed over the same weekend last year.

The western suburbs are again the most popular region this weekend for auctions with 140 scheduled. Next highest is the inner city with 112, closely followed by the north east with 111, the inner south 101, the inner east 91, the outer east 81, the north 76 and the south east with 64 auctions listed.

Reservoir is the most popular auction suburb this weekend with 13 followed by several suburbs with 11 auctions listed including St Albans, Melbourne, Bundoora, Richmond, St Kilda and Elwood.

Home buyers remained active over the Cup holiday last weekend with another robust result despite the usual low number of properties auctioned.

Melbourne recorded a clearance rate of 78.3 per cent last Saturday, which, although down on the previous weekend’s boomtime 83.7 per cent result, was significantly higher than the 66.3 per cent recorded over the same holiday weekend last year.

Melbourne’s outer east suburban region reported an exceptionally strong result last weekend with a 91.5 per cent clearance rate and clearly the highest of all the regions. Next highest was the inner city with 88.9 per cent followed by the north 87.8 per cent, the west 79.6 per cent, the inner south 74.4 per cent, the north east 73.9 per cent, the south east 70.8 per cent, and the inner east the underperformer again with a clearance rate of 67.4 per cent.

The auction market continued to perform strongly over the month of October with overall clearance rates rising from September’s 75.8 per cent to 76.3 per cent. This was also well ahead of the 69 per cent reported over October last year.

The median auction price increased over the month from $815,000 to $858,000 and is now 7.3 per cent higher than the $800,000 recorded over the same month last year.

Average weekend auction numbers, however, continue to fall – down from 800 over September to 706 over October and well below the 862 average of October last year. So far this year 28,452 auctions have been conducted in Melbourne which is 10.9 percent fewer than the number listed over the same period last year.

Lower interest rates have been a key catalyst for rising auction markets with the Reserve Bank leaving rates on hold over November for the third consecutive month.

The economy however continues to send mixed messages – a lower jobless rate but sharply falling full-time employment, a high dollar and underlying inflation at record low levels.

Although the bank would be mindful of strong housing market activity in Melbourne and Sydney, the likelihood remains that rates will be cut next year unless the economy improves.

Dr Andrew Wilson is Domain Group Chief Economist