Strong Melbourne auction market rolls on into spring as rates and listings remain low

The Melbourne home auction market continues to blossom with a continuation of winter’s robust clearance rates fuelled by low interest rates and relatively fewer choices for enthusiastic buyers.

Just over 850 homes are scheduled to go under the hammer this Saturday which will be significantly higher than the 877 auctioned last weekend but again well down on the will also be well down on the 1034 conducted over the same weekend last year.

The Melbourne market has now reported a drop of 2079 weekend auctions so far this year compared to the same period last year- a decrease of 8.3 per cent.

Melbourne’s inner south is the most popular region for auction s this weekend in Melbourne with 138 listed followed by the west with 125, the inner east 115, the north east 110, the inner city 107, the outer east 100, the north 65 and the south east 63.

Reservoir is the most popular auction suburb in Melbourne on Saturday with 17 followed by Glen Iris 15, St Kilda, Glen Waverley and Kew each with 14, Hawthorn 12 and a number of suburbs with 11 auctions listed including Cheltenham, Bentleigh and Port Melbourne.

The Melbourne home auction market reported another strong result for the official start to the spring selling season last weekend.

Melbourne recorded a clearance rate of 77.5 percent last Saturday which was just below the 77.9 per cent reported over the previous weekend but higher than the 76.3 per cent recorded over the same weekend last year.

Melbourne’s auction results have been remarkably consistent recently, with rates exceeding 75 per cent over the past six weekends and the market at its strongest since last winter.

Solid auction market conditions are being shared by Melbourne’s regions with the inner south, the north, the north east and the west continuing to lead the pack.

Strong buyer activity is being fuelled by historically low interest rates and solid competition among banks for mortgage customers.

The Reserve Bank met this week for its monthly decision on the direction of official rates with rates predictably to be left on hold over September following last month’s cut to a new record low 1.5 per cent.

The bank will await the impact of last month’s cut to assess if further cuts are required, however latest economic data remains underwhelming with the likelihood of yet another rate cut later in the year, particularly if the labour market deteriorates and inflation continues to decline.

Dr Andrew Wilson is Domain Group Chief Economist. Twitter: @DocAndrewWilson