What's dragging down results in Melbourne's auction market

Melbourne’s hot auction market has shown signs of weakening over recent weekends, with clearance rates falling over each of the past four Saturdays. Unprecedented numbers of September auctions are a factor in weaker clearance rates as sellers face more competition and buyers have more choice of properties.  

Melbourne’s Super Saturday of early spring auctions reported overall solid results as a record 1101 September listings tested the resilient market as sellers avoided the distractions of next weekend’s AFL Grand Final.   

Melbourne recorded a clearance rate of 73.3 percent on Saturday – lower than last weekend and the same weekend last year.

Auction activity will continue to rise up until the pre-Melbourne Cup Super Saturday. 

Early signs however are emerging that the Melbourne market may be losing its early spring energy with buyers and sellers more evenly matched. 

Regional results in Melbourne remain reasonably consistent with the south east recording the highest rate at the weekend at 80.4 per cent followed closely by the north east with 80.3 per cent. Next highest was the inner south with 78.6 percent, the outer east 74.6 per cent, the north 72.3 per cent, the west 72.1 per cent, the inner east 70.5 per cent and the inner city down this weekend at 67.4 per cent.

A closer look at the inner city results reveals that the unit market dragged down the overall result both for the region and Melbourne metro as whole. Inner city units recorded a clearance rate of 55 percent from 77 auctions compared to houses with an 80 percent result.

Notable sales reported at the weekend included a four-bedroom home at 127-129 Park Drive, Parkville sold for $3.52 million by Collins Simms, a five-bedroom home at 36 Sarah Crescent, Templestowe sold for $3.13 million by Ray White Manningham, a three-bedroom home at 7 Stewart Street, Brighton sold for $3.02 million by Nick Johnstone, a four-bedroom home at 4 Wood Street, Fitzroy sold for $2,875,000 by Nelson Alexander and a four-bedroom home at 20 Bradford Avenue, Kew sold by Kay and Burton for $2.76 million. 

The most expensive property reported sold at auction at the weekend was a five-bedroom home at 38 Edro Avenue, Brighton East sold for $3.91 million by Hocking Stuart. The most affordable property reported sold at the weekend was a two-bedroom unit at 2/264 Melrose Drive, Tullamarine sold for $280,000 by Jason Real Estate Sales.

• For a list of weekend auction results in Melbourne click here.

Melbourne’s trend auction price fell marginally at the weekend down from the previous weekends $806,222 to $793,972. Local trend auction prices remain 10.4 per cent higher than the $719,375 recorded over the same weekend last year.

Melbourne’s spring auction market takes a break next weekend as all eyes turn to the AFL Grand Final on Saturday with around 50 auctions listed. The market will be up and running however the following weekend with another strong test of nearly 1200 auctions scheduled.  

Dr Andrew Wilson is Domain Group Senior Economist