There were 483 auctions held in Melbourne last weekend ending 28th July 2019 showing a clearance rate of 71% according to the REIV. At the same time last year (June 2018) there were 714 auctions with an auction clearance rate of only 63%.
Melbourne’s auction clearance rate of 71% suggests that the Melbourne property market’s slump over the last 12 months may be over, and new data indicates a recovery is under way. Interest rates being extremely low at present has attracted many new buyers into the property market. As a buyer’s agent/ buyer’s advocate I have noticed a lot of people attending open for inspections. Therefore, by the RBA in cutting interest rates a few weeks ago it has certainly helped the property market in Melbourne as well as other parts of Australia by increasing demand.
However, in my opinion there are still quite a few head-winds in the broad general economy. Retail is down and consumers aren’t spending but rather saving their hard-earned pennies. I still do believe that it’s a buyer’s market as there’s a lot of hesitancy from buyers especially at auctions. In addition, although auction clearance rates are climbing the auction numbers compared to last year’s are still way down. For example, generally in the winter colder months there are usually between 600 – 800 auctions every weekend. Presently, we are at about half that number. It will definitely be interesting what happens to the auction clearance rates when more properties start coming onto the market in the weeks ahead. That’s where we will know whether or not the property market is healthy or not!
Your Australian Property Tips #
Don’t be fooled by the higher auction clearance rates as it’s not the best yardstick to measure the performance of the Melbourne property market. Make sure you’re extremely diligent when working out a price to pay, as the last thing you want is that you over pay!
Happy House Hunting!