Melbourne's auction clearance rate surges ahead

The resilient Melbourne home auction market strengthened over the weekend, recording its highest result since February.

Melbourne recorded a heady clearance rate of 76.3 per cent on Saturday. That was well above the 73.8 per cent recorded the previous weekend and just below the strong 77.5 per cent recorded over the same weekend last year.

Saturday’s result was also above the average rate of 75.5 per cent recorded over the past 10 weekends and was achieved despite the distractions of the school holidays, which finished last week.

A stronger clearance rate was reported despite solid numbers of holiday auctions with 702 homes under the hammer on Saturday – well ahead of the previous weekend’s 482 and the 562 listings reported last year over the same weekend.

Melbourne’s inner-city suburban region recorded the highest clearance rate at the weekend with a strong 81.1 per cent result. Next highest was the inner south and the north, each with 79.7 per cent, followed by the north-east with 76.8 per cent, the west with 76.2 per cent (with the highest reported sales at 77), the south-east with 75 per cent, the outer east 72.2 per cent and the inner east with 70 per cent. This was yet another remarkably consistent narrow spread of results this weekend.

Notable sales reported at the weekend were:

• A four-bedroom home at 129 Powlett Street, East Melbourne, sold for $2,320,000 by Dingle Partners;
• A three-bedroom home at 3 Glenluss Street, Balwyn, sold by Marshall White for $2,035,000;
• A three-bedroom home at 16 Fourth Street, Black Rock, sold for $1,940,000 by Buxton, and;
• A three-bedroom home at 2A Moorabbin Street, Sandringham, sold for $1,930,000, also by Buxton.

The most expensive property reported sold at auction at the weekend was a four-bedroom home at 3 St Kinnord Street, Aberfeldie, sold for $2,750,000 by Rendina Real Estate. The most affordable property reported sold at the weekend was a one-bedroom unit at 7/161A Oakleigh Road, Carnegie, sold for $265,000 by Woodards Carnegie.

Full weekend auction results

Melbourne recorded a median auction price of $680,000 on Saturday which was above the $622,500 recorded the weekend before. Saturday’s median was also 1.5 per cent higher than the $670,000 recorded over the same weekend last year. A total of $279.1 million was reported sold at auction at the weekend.

Although the Melbourne auction market continues to track at its strongest since winter last year, solid buyer activity is providing no relief to tenants with Domain Group reporting rent increases for both houses and units over the past year.

Record levels of new home building are being offset by continuing strong demand for rental accommodation from sidelined first home buyers and high migration. Reduced activity from local investors since last June is also acting to keep demand well ahead of supply and consequent upward pressure on rents.

Apartments purchased by international investors remaining empty may also be offsetting potential increases in rental stock from the recent inner-city unit boom.

Dr Andrew Wilson is Domain Group chief economist. Twitter: DocAndrewWilson