Strong Melbourne market struggles for listings, but won't last long

Confident buyers continue to energise the Melbourne late-winter home auction market with falling interest rates to bolster rising activity into spring.  

Although clearance rates have risen over recent weeks, the number of homes listed for auction has fallen, providing enthusiastic buyers with fewer choices.

This weekend just over 500 auctions are scheduled to be conducted in Melbourne, which is well below last weekend’s 612 listings and again significantly lower than the 785 offered for auction over the same weekend last year.

Melbourne’s west will host the highest number of regional auctions this weekend with 89, followed closely by the north east with 87, the inner south 70, the inner east 66, the inner city 55, the outer east 45, the north 43, and the south east with 33 auctions listed.

Reservoir is clearly the most popular suburb in Melbourne for auctions this weekend, with 17, followed by Hawthorn and Mill Park, each with nine, east Bentleigh, eight, and a number of suburbs with seven auctions listed, including Brighton, Camberwell, Brunswick, Epping and Kensington.

The Melbourne home auction market recorded a spike in activity last weekend following last week’s decision by the Reserve Bank to cut official interest rates.   

Last Saturday’s strong 77.9 per cent result was higher than the previous weekend’s 75.7 per cent rate and the second highest reported this year so far. The weekend result was just below the 79.5 per cent recorded over the same weekend last year.  

Auction numbers, although set to rise gradually over coming weekends into spring, will likely remain well below last year’s record-level boom-time listings but will be similar to the 2014 and 2013 markets at the same time.

Melbourne’s suburban regions reported consistent results at the weekend with small variance between high and low clearance rates.

Low auction numbers continue to challenge the Melbourne auction market but listings will increase significantly over coming weekends as the spring selling season unfolds. August 27 is set to be the usual end-of-month season opener with more than 900 auctions likely to be conducted – so some relief is in sight for frustrated and cashed-up home buyers.

Andrew Wilson is Domain Group’s chief economist

Twitter @DocAndrewWilson