Melbourne auction market to smash records

The winter auction market is set to end with a bang – breaking yet another record.

This weekend, record numbers of homes  are scheduled to go under the hammer for any August on record, providing a positive platform for the coming spring selling season.

More than 1000 auctions are listed this Saturday which will clearly be the highest number ever conducted on an August Saturday in Melbourne. This weekend’s auction numbers are well ahead of last weekend’s 838 listings and the 770 conducted over the same weekend last year.

There have been more than 4200 weekend auctions during August – significantly more than the 3189 listed over August last year.

Confident sellers continue to engage the strengthening Melbourne housing market in record levels for this time of the year.

Melbourne’s outer east will host the highest number of auctions this weekend with 154 followed closely by the inner city with 152, the inner south with 145, the inner east 141, the west 140, the north east 131, the north 97 and the south east 53.

Inner suburban auction numbers are rising sharply as spring approaches.

The most popular suburb for auctions this weekend is Richmond with 22 followed by Reservoir with 20, Glen Waverley and East Bentleigh each have 18, Kew and South Yarra have  15 and North Balwyn and Balwyn each have 14 auctions scheduled this Saturday.

The Melbourne auction market tracked backwards last weekend following a month of strong results.

Melbourne recorded a 76.0 per cent clearance rate, down from the 79.9 per cent recorded the previous weekend but again just above the 75.3 per cent rate of the same weekend last year.  Last Saturday’s result was the second-lowest weekend rate for the year and reverses the recent trend of rising clearance rates.

The outer east relinquished its usual top spot recording the lowest clearance rate of all the regions last Saturday and one of the lowest it has recorded for some time. 

 However, regional results provided some surprises last weekend that clearly contributed to the lower overall clearance rate. 

The regions were again reasonably close to each other reflecting the current consistency of the market through prices ranges and locations.

Next week the Reserve Bank will meet to determine the direction of official interest rates for September. Rates have been on hold for the past three months and are most likely to remain at the 50-year low of 2 per cent next month. 

The bias for interest rate direction over the short term has however changed sharply over the past month with unemployment levels spiking over July back to 12-year highs and turmoil in global equity markets reflecting concerns over the declining performance of the China economy.

The Reserve Bank has also now conceded that national underlying economic growth may be lower than previously expected. If unemployment fails to improve over coming months, another cut in rates will occur sooner rather than later – particularly as dark clouds are clearly gathering over the global economy.

Dr Andrew Wilson is Domain Group Senior Economist Twitter @DocAndrewWilson​