Melbourne auctions: Number of withdrawn properties may rise but those that proceed selling well

Melbourne’s auction market will be entering a period of weakness as the second lockdown bites, experts say.

Clearance rates were weak at 48.6 per cent and a high number of auctions were being cancelled, brought forward or converted to private sale campaigns, Domain senior research analyst Nicola Powell said.

There are 546  auctions scheduled for Saturday, up on last week.

“I’m expecting withdrawals to be elevated again,” she said. “People would have locked in their auction thinking it was on-site.

“In round one of lockdown we had four weeks’ worth of high levels of withdrawals.”

Domain data shows the withdrawal rate at the weekend was 45.6 per cent but of those auctions that went ahead, the online success rate was 68.3 per cent.

While sellers might be more comfortable this time around, Dr Powell said the lockdown would cause many people to reassess their plans.

“I’m expecting a similar outcome,” she said. “But it might not be as severe as round one.”

Barry Plant chief executive Mike McCarthy said while some auctions were not going ahead, the ones that did were performing well.

“What we’re seeing is conversions to other sales methods,” he said. “Where the property isn’t showing us much promise, they’re converting it to private sale and sale by a set date.”

SOLD - $422,500

3/4 Dalgety Street, Brunswick West VIC 3055

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One Barry Plant auction which would go ahead was for 3/4 Dalgety Street, Brunswick West. Mr McCarthy said it had had good interest and would do well at auction.

Nelson Alexander’s Steven Shaw said both of his auctions scheduled for Saturday were expected to sell before.

One home, 109 Barrow Street in Coburg, was a run-down house in need of a lot of work. But he said it was likely to sell in a boardroom auction on Thursday night because it had been priced well.

“Things are selling well before auction, if it’s not selling it might still be overpriced,” he said. “The vendor might not be accepting the market conditions at the time.”

SOLD - $1,075,000

109 Barrow Street, Coburg VIC 3058

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Mr Shaw said prices had held up because of the few properties up for sale and relatively high demand.

“Overall there’s a big lack of property on the market, which is very similar I would imagine around the inner city,” he said. “There doesn’t seem to be a big slowdown in the sales.”

Mr McCarthy said because the last lockdown proved properties could still be sold over the internet, buyers would be less worried this time around.

Because of this, buyers and sellers would readjust and clearance rates might recover, he said.

“Since then we’ve had the opportunity to understand and get used to operating in this environment,” Mr McCarthy said. “People are getting used to – dare I say – COVID-normal.

“If you have a body of evidence over three or four months of sales being achieved, and we [agents and sellers] have a propensity not to go ahead with auctions if it’s not doing well.”