Steady Melbourne property market awaits a deluge

Melbourne’s late spring auction market will continue to be tested by high numbers of auctions this weekend.

Well over 1200 homes are scheduled to go under the hammer on Saturday which although below last weekend’s 1333 auctions remains well ahead of the 1154 listed over the same weekend last year.

Next weekend the auction market will face its biggest-ever challenge when remarkably over 1600 auctions are scheduled – an all-time record Saturday offering and well ahead of the previous record 1558 set on 28 October 2014.

The west will host the most number of auctions this weekend with 203 followed by the outer east 181, the inner east 166, the north east 164, the inner south 160, the inner city 136, the north 116, and the south east 61.

Glen Waverley and Mount Waverley have the highest number of auctions this Saturday with 25 each followed by North Balwyn 21, Brighton 19, Northcote 18, Reservoir and Richmond each with 17 and East Bentleigh 16.

The market produced a steady result last weekend and still remains encouraging overall for late spring sellers.

Melbourne recorded a clearance rate of 69.8 per cent last Saturday which was just above the 69.7 per cent recorded the previous weekend but below the 72.1 per cent recorded over the same weekend last year.

Despite a stable result last weekend, the Melbourne market has tracked steadily backwards over spring and has now recorded three consecutive Saturdays with rates below 70 per cent for the first time since July 2013 – well over two years ago.

Auction markets usually run out of puff as the end of the year approaches with higher listings pushing supply above demand levels. This year’s seasonal decline in rates may have been exacerbated by recent rises in interest rates impacting buyer confidence.

Melbourne’s trend weekend auction price increased marginally from the previous weekend’s $765,750 to $768,250. The weekend trend price remains 7.4 per cent higher than the $715,000 recorded over the same weekend last year.

Although the weekend auction market has faded over recent months and is now at its lowest level in over two years, the market nonetheless remains in reasonable shape for both buyers and sellers. Record levels of late spring listings are providing buyers with more choice and sellers are still currently favoured by solid buyer activity in all regions and price ranges.

Clearance rates however are likely continue to weaken over the next month as a record flood of auctions provides an unprecedented end of year test for the Melbourne market.

Dr Andrew Wilson is Domain Group’s senior economist @DocAndrewWilson