Subdued Melbourne housing market as election campaign begins

The Melbourne home auction market was slightly weaker last weekend despite the potential stimulus of lower mortgage rates and tax cuts as announced during the week.

Auction numbers were well down on the April record of 1270 listings and last weekend, with 912 homes listed to go under the hammer. This was, however, similar to the 919 auctioned over the same weekend last year.

This weekend nearly 750 auctions will be held which will again be lower than last weekend’s total and also lower than the 837 held over the same weekend last year.

The west will again host the highest number of regional auctions this weekend with 119 followed by the outer east 107, the north east 102, the inner city 95, the inner east 93, the inner south 92, the north 58 and the south east with 51 auctions scheduled on Saturday. 

Richmond is the most popular suburb for Melbourne auctions this weekend with 14, followed by Mount Waverley, Glen Iris and Glen Waverley each with 13, Northcote with 10, and a number of suburbs with nine auctions scheduled including Craigieburn, East Brighton, Rosanna and South Yarra.

Melbourne reported a clearance rate of 73.1 per cent last Saturday which was below the 75 per cent recorded the previous weekend and also below last year’s strong rate of 79.7 per cent recorded over the same weekend. 

Last Saturday’s result was the lowest recorded for the year but only marginally below the autumn weekend average of 74.6 per cent reported to date. Autumn results continue to track in a narrow range with a high of 76.3 per cent and the low of 73.1 per cent – providing some certainty and consistency for both buyers and sellers.

Cuts to mortgage rates and reductions in taxes announced recently failed to provide a perceptible bounce to the Melbourne weekend auction market. Any measurable positive impact, however, is likely to be offset by the seasonal effect of the approaching typically quieter winter selling market and the cyclical impact of declining underlying price growth.

The announcement of the federal election and a lengthy election campaign may also act to quell some buying and selling decisions, particularly given the potential for significant changes to the treatment of property taxes for investors.

Dr Andrew Wilson is Domain Group’s chief economist

Twitter @DocAndrewWilson