Melbourne autumn market still hot ahead of holiday break

The Melbourne home auction market has commenced autumn with yet another strong result for sellers ahead of the pause in activity this Saturday due to the Labour Day holiday.

This weekend Melbourne will host just over 250 auctions which will be significantly lower than last Saturday’s 1182 listings and also well below the 342 auctioned over the same weekend last year.

The west suburban region will again host the most number of auctions on Saturday with 62 followed by the outer east 41, the north 29, the north east and the inner east each with 28, the inner city and the south east each with 22 and the inner south with 19 auctions listed on the weekend.

The most popular suburb for auctions this weekend in Melbourne is Craigieburn with 8 followed by Hopper Crossing 6, Glen Waverley, St Albans and Burwood each with 5 and Reservoir, Glenroy and Brunswick East, Melbourne and Altona North each with 4 auctions each on Saturday.

The Melbourne home auction market has followed up its stunning Super Saturday result with another strong clearance rate last weekend but from significantly fewer listings.

Melbourne recorded a clearance rate of 80.6 per cent last Saturday which was slightly lower than the 82.4 per cent recorded the previous weekend but remained well ahead of the 75.4 per cent recorded over the same weekend last year.

Despite the lower result, Melbourne has now recorded consecutive weekend rates above 80 per cent for the first time since June 2015 – a clear indication of the underlying strength of the local market.

Melbourne’s north, west, south east and outer east suburbs continue to record boom time clearance rates although the range between the highest and lowest regions remains reasonably tight.

The north recorded the top regional clearance rate last weekend of 88.8 per cent closely followed by the north east 87.3 per cent, the south east 84.2 per cent, the west 83.9 per cent, the outer east 83.0 per cent, the inner south 79.2 per cent and the highest sales at 141, the inner city 75.3 per cent and the inner east with a clearance rate of 73.5 per cent.

Low interest rates remain a significant driver for the recent strong performance by the Melbourne housing market. Reflecting a positive result for national economic growth over the December quarter announced by the ABS, the Reserve Bank predictably decided to leave official interest rates on hold over March. Although underlying economic activity remains underwhelming, the likelihood is that rates will remain on hold at least until mid-year.

Mortgage rates however will likely continue to rise with surging investor lending again a key target for financial regulators. Higher rates for investors however have the risk again of market disruption with lending volumes heavily skewed towards NSW and the Sydney and Melbourne rental markets still tightening with a shortage of accommodation and rising rents.

Andrew Wilson is Domain Group Chief Economist Twitter@DocAndrewWilson join on LinkedIn and Facebook at MyHousingMarket