Testing times ahead

A review of recent auction results shows that the overall auction market is softer than it was in the first half of this year, which is partly due to volumes but also concern about interest rates.

There are more than 1000 auctions a weekend for the next three weeks — a level of sales that will be a hard test of the market.

Overall this year has seen a record number of auctions. However, total transactions are below their 2007 peak.

Following the latest rate rise, it’s shaping up as a mixed year. In the first quarter, clearance rates were more than 80 per cent and demand was very strong; mid-year and early spring saw clearance rates in the high 60 per cent; and now an average of 1000 auctions a weekend.

As the year has progressed, conditions have improved for buyers, with strong demand continuing in more affordable suburbs.

The strongest demand in the auction market has been recorded in Watsonia, Hillside, Bellfield, Viewbank, Windsor, Ferntree Gully and Macleod. While the year-to-date clearance rate for all of Melbourne is 73 per cent, these suburbs have recorded clearance rates of more than 85 per cent — a very strong result.

The highest number of auctions has been recorded in Richmond, Reservoir, St Kilda, Brighton and Elwood. That is not remarkable as they are not only large suburbs but ones where auctions are a very popular method of sale.