The Melbourne auction market recorded its lowest result for 5 months at the weekend as the weight of an unprecedented surge in late-year auction listings unsurprisingly impacts on buyer activity.
The 67 percent auction clearance rate reported on Saturday was significantly below the spring average of 74 percent and just ahead of the 65.3 percent recorded over the same weekend last year. Indications are increasing that the Melbourne spring auction market has peaked with a downward trend in activity emerging since the Melbourne Cup holiday weekend.
A significant contributor to declining buyer activity is the pre-Xmas rush of properties onto the auction market. Sellers have sensed that the market may be peaking and were set to take advantage of what to recently at least have been the best selling conditions since 2010.
1319 homes were listed for auction in the Melbourne metro area on Saturday which is over 400 more than the 908 listed over the same weekend last year. And next weekend will continue to put pressure on fading buyer activity with another 1316 homes listed for auction again, nearly 500 ahead of last year’s number.
Despite a weakening overall auction clearance rate, Melbourne’s inner east and outer east suburban regions continue to produce outstanding results at auction – as they have for most of the year. The outer east was again best at the weekend with an auction clearance rate of 78.8 percent followed by the inner east with 74.2 percent. These two were well ahead of the pack with next best the north suburbs with 69.2 percent, the inner city with 67 percent, the west with 66.9 percent and the inner south with 64.8 percent.
Notable auction sales in Melbourne’s outer east region reported at the weekend included a 6 bedroom house at 5 Halcyon Drive Wheelers Hill sold by Ray White Glen Waverley for $2,300,000, a 5 bedroom house at 29 The Outlook Glen Waverley sold for $1,750,000 also by Ray White Glen Waverley, a 3 bedroom home at 33 Malcolm Court Mount Waverley sold by Barry Plant for $1,505,000 and a 4 bedroom home at 12 St Georges Crescent Ashburton sold for $1,360,000 by Marshall White.
In the inner east a 4 bedroom home at 37-39 Rochester Rd Canterbury sold by Jellis Craig for $5,760,000, a 3 bedroom house at 11 Grange Road Kew sold for $3,250,000 by Fletchers, a 4 bedroom house at 59 Cookson Street Camberwell sold by Marshall White for $2,613,000 and a 2 bedroom home at 13 Studley Park Road Kew sold for $2,601,000 by Noel Jones.
In the inner city suburbs a 4 bedroom house at 115 Page Street Albert Park sold for $2,310,000 by RT Edgar, another 4 bedroom home at 35 Gore Street Fitzroy sold for $2,065,000 by Nelson Alexander, a 4 bedroom house at 128-130 Gatehouse Street Parkville sold by Jellis Craig for $1,830,000 and a 3 bedroom house at 32 Seymour Avenue Armadale sold for $1,623,000 by Marshall White.
Notable unit sales at the weekend included a 3 bedroom unit at 406/360 St Kilda Road Melbourne sold by Hocking Stuart Albert Park for $1,555,000, another 3 bedroom unit at 2/57 Durham Street Eaglemont sold for $1,050,000 by Miles Real Estate, a 2 bedroom unit at 5/1 Alexandra Avenue South Yarra sold by Sotheby's Realty for $950,000 and a 3 bedroom unit at 5/45 Milton Street West Melbourne sold for $925,000 by Collins Simms Clifton Hill.
The Melbourne weekend auction market is starting to exhibit real signs of spring weariness although the inner and outer east suburbs just keep on keeping on. The final test of the year awaits next weekend with high auction number set for the metro market.
The Melbourne housing market is set to record its best year since 2010 with median price set to increase by around 7 percent. Price growth next year will however be more subdued particularly if local economic activity continues to decline. The Reserve Bank as expected has decided to leave interest rates on hold until its next meeting in February however weak GDP numbers released last week increase the likelihood of a cut in rates early next year.
In the meantime the Melbourne spring auction market is set to go out with whimper not a bang.
Dr Andrew Wilson is Senior Economist for Australian Property Monitors Follow @DocAndrewWilson
Results at http://www.homepriceguide.com.au/