Melbourne market defies winter slow-down

Although auction numbers continue to fall as the increasingly distracted Melbourne mid-winter market typically wanes, results clearly remain positive for most sellers.

Melbourne will host over 650 auctions this Saturday which will be lower again than last weekend’s 732 listings but well ahead of the 533 auctioned over the same weekend last year.

Another big auction weekend for Melbourne’s west with 145 auctions listed on the weekend as the regional top performer.  Next highest is the outer east with 100 followed by the north east 95, the inner city 74, the north 72, the south east 61, the south 59 and the inner east with 41 auctions listed.

Reservoir will be the most popular suburb this Saturday in Melbourne for auctions with 14 scheduled followed by Craigieburn and Mill Park each with 12, Richmond and Werribee each with 10 and Glenroy and Croydon that will each host 9 auctions this weekend.

The Melbourne weekend home auction market produced another robust mid-winter result for sellers last Saturday as first home buyers greeted July with significant reductions in stamp duty now activated.

Melbourne reported a clearance rate of 73.5 percent last weekend which was higher than the previous weekend’s 72.6 per cent rate and the same as the 73.5 per cent recorded over the same we Outer suburban, lower priced regions produced strong results at the weekend which may reflect increased activity from first home buyers. Results in inner- suburban, higher prices regions however were again generally lower indicating the usual mid-winter distractions typical of the time of the year.

The Melbourne home auction market tracked backwards over June impacted by the usual mid-winter decline in activity from increasingly distracted buyers and sellers.

Melbourne recorded an overall home auction clearance rate over June of 70.7 per cent which was down on the 73.4 percent reported over the previous month but still higher than the 67.9 per cent recorded over June last year.

Although clearance rates were lower over the month, auction volumes have surged this year in Melbourne with 18175 listings over the first 6 months of the year compared to just 16083 over the same period last year – an increase of 13.0 per cent

Melbourne recorded a median auction price of $877,250 over June which was 1.4 per cent lower than the $890,000 recorded over May but 10.3 per cent higher than the $795,000 recorded over June 2016.

This week the Reserve Bank convened for its regular monthly meeting to determine the direction of official interest rates over June. Following better economic news this month, the Bank predicably decided to leave rates on hold at the record 1.5 percent where they have been since the last cut in August last year.

Although monthly unemployment measures can be volatile, the latest data from the ABS revealed a sharp decline in the national seasonally adjusted rate over May from 5.7 per cent to 5.5 percent – the lowest result since February 2013.

With the recent sharp decline in the jobless rate, the Reserve Bank is now more likely to keep rates on hold over the foreseeable future – although the recently underperforming economy is not out of the woods yet.

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