Solid Melbourne auction market pauses for winter break

The Melbourne weekend home auction market is settling into its usual mid-winter break with buyers and sellers distracted by school holidays. Auction numbers will be relatively low through July and gradually revive through August for the typical spring revival.

Just over 500 homes will be auctioned in Melbourne this weekend, which although higher than last weekend’s meagre federal election-impacted total of 206 auctions, will be well below the 900-plus listed over the previous two weekends. This weekend auction numbers, however, will be similar to the 559 auctioned over the same weekend last year.

Melbourne’s west suburban region has the highest number of auctions scheduled this weekend, with 108, followed by the north east 91, the inner city 67, the outer east 63, the inner south 55, the north 48, the south east 42 and the inner east with just 30 auctions listed.

St Albans and Richmond are the Melbourne suburbs with the most auctions this weekend, with 12, followed by many suburbs with eight auctions scheduled, including Reservoir, Mill Park, Melbourne, Mount Waverley, Hoppers Crossing and Bundoora.

The Melbourne weekend home auction market took last Saturdays federal election in its stride reporting a solid clearance rate in what was nonetheless predictably a quiet day for auction activity. 

Melbourne reported a clearance rate of 73.5 per cent on Saturday which was higher below the year-low 71.7 per cent recorded over the previous weekend and again well below the 78.7 per cent reported over the same weekend last year.  

The Melbourne home auction market now heads into the typically quieter mid-winter season in good shape. Melbourne recorded a total clearance rate of 68.8 per cent over June, which was just below the 70.3 per cent recorded over May. 

Low and falling interest rates continue to support buyer and seller confidence, with strong competition amongst banks for mortgage customers also driving housing demand. Although the Reserve Bank has decided to leave interest rates on hold over July at the record low 1.75 per cent, the odds have certainly narrowed for a cut sooner rather than later and perhaps as soon as next month.

The June quarter inflation data due to be released by the Australian Bureau of Statistics on July 27 will provide a key determinant of future rate settings with another low result likely to activate the Bank.

Political uncertainly both locally and internationally can only add to the case for a rate cut to bolster a clearly underperforming national economy.

Andrew Wilson is Domain Group’s chief economist

Twitter @DocAndrewWilson