Melbourne property market delivers again but much bigger test awaits

The Melbourne home auction market has recorded yet another remarkably consistent result, despite a significant but predictable lift in early season listings.

Melbourne reported a strong clearance rate of 78.7 per cent on Saturday, which was almost identical to the 78.5 per cent recorded the previous weekend, but higher than the 75 per cent reported over the same Saturday last year.

The Melbourne market continues to track at remarkably consistent levels and clearly remains a positive market overall for sellers. Weekend auction clearance rates averaged 79.6 per cent over the spring selling season last year and early indications are the autumn season will likely produce similar results.

Auction numbers were significantly higher again this weekend as the February market gathers its usual seller momentum. About 470 homes were scheduled to go under the hammer, which was well ahead of the previous Saturday’s 192 and similar to the 466 auctions conducted over the same weekend last year.

Higher auction numbers also translated into a more representative spread of regional listings at the weekend, with a higher proportion of inner suburban, higher-priced homes going under the hammer. This trend will escalate over coming weekends.

Melbourne’s northern suburban region continued to record the highest weekend clearance rates, as it did for most of last year. The north east was tops at 91.4 per cent, followed by the north at 87.5 per cent, the inner east at 86.4 per cent, the west at 80.3 per cent and the highest sales with 61, the outer east at 76.6 per cent, the inner south at 76.4 per cent, the south east at 72.4 per cent and the inner city trailing again this weekend with 67.6 per cent.

Notable sales reported at the weekend included:

• a three-bedroom home at 7 Cloris Avenue, Beaumaris sold for $1.91 million by Century 21 McCann Alliance;
• a three-bedroom home at 47 Brougham Street, Kew sold by Caine Real Estate for $1,668,000;
• a four-bedroom home at 3 Kirrum Close, Wantirna South sold for $1.66 million by JRW Property;
• a four-bedroom home at 69 Lloyd Street, Strathmore sold for $1.63 million by Considine Real Estate;
• a four-bedroom home at 4 Little Union Street, Brighton East sold by Gary Peer and Associates for $1.63 million.

The most expensive property reported sold at auction was a four-bedroom home at 200 South Road, Brighton East, which sold for $1.92 million by Nick Johnstone. The most affordable property reported sold at the weekend was a one-bedroom unit at 8/21 Hampton Parade, West Footscray, which sold for $241,000.

For a list of Melbourne auction results click here.

Melbourne recorded a median auction price of $752,500 on Saturday, which was higher than the $652,500 reported the previous weekend and 6 per cent higher than the $710,000 recorded over the same weekend last year. A total of $184.22 million was reported sold at auction in Melbourne at the weekend.

The Melbourne auction market continues to pass its early year tests but next weekend sellers will have significantly more competition and buyers considerably more choice. Nearly 900 homes are due to go under the hammer which will be approaching double the number listed on Saturday.

Last week, the Reserve Bank of Australia met for the first time to decide the level of official interest rates for February. The RBA, as expected, decided to leave rates on hold for the fifth consecutive month at the record low 1.5 per cent.

The chance of a near-term cut by the bank, however, surely remains unless the economy improves. Recent economic data has been underwhelming, with the national jobless rate rising to 5.8 per cent over December — the highest result for the year — and retail sales falling over December.

Dr Andrew Wilson is Domain Group Chief Economist Twitter@DocAndrewWilson join on LinkedIn