This article is from the Australian Property Journal archive
BUYERS are continuing to retreat from the auction market despite being spoiled for choice as sellers keep flooding the market with more properties.
Last weekend in Melbourne there were 836 auctions and 508 properties sold, 328 were passed in of which 210 were on a vendors bid – resulting in a clearance rate of 61%. This weekend last year saw 722 auctions and a clearance rate of 81%.
Meanwhile the REIV said it has not received the results to 111 auctions, which could support independent data from Australian Property Monitors’ Home Price Guide, which shows the market is in worst shape, with a clearance rate of around 53.3%.
REIV CEO Enzo Raimondo said the Melbourne residential auction market continues to feel the impact of the interest rate increases.
The total volume of auctions sales was $375.05 million, whilst there were 558 private sales totalling $287.71 million.
Raimondo said the current level of demand is likely to continue as stock levels will remain high with over 1,000 auctions expected for each of the next three weekends.
“And buyers are more cautious in light of the banks decisions to increase rates above the decision of the RBA,” he added.
Following the RBA’s official interest rate rise of 0.25% to 4.75%, the Commonwealth Bank immediately lifted its standard variable rates by 0.45% to 7.81%. Several days later the National Australia Bank also raised its rates by 0.43% and before the weekend auctions ANZ and Westpac each increased their rates by 0.39% and 0.35% respectively.
Sydney’s auction market also continued to bottom, according to APM’ Home Price Guide.
Last weekend there were 572 auctions and 200 sales totalling $199.7 million resulting in a clearance rate of 53.8% which is below last year’s 67.4%, although there were fewer auctions, with 401 properties going under the hammer and 263 sales.
The most expensive property was a three bedroom house in Newtown for $13.9 million and cheapest was a one bedroom unit in Fairfield for $135,000.
Last weekend’s auction supports recent data released by independent firm SQM Research which found residential property listings have risen across all capital cities in October, by as much as 20.2% in Melbourne where 26,521 houses and 9,547 units were advertised for sale during the month.
But Melbourne is not alone, Brisbane recorded the highest annual increase, up 52.9% to 24,412 house and 5,787 units. Brisbane has the second highest number of houses for sale, behind Melbourne.
Sydney was third with 20,012 houses for sale and the city has the highest number of units listings of all the capital cities totalling 12,370.
SQM Research managing director Louis Christopher said this large jump in listings indicates an ever increasing softening market.
It’s as simple as that. And now with the most recent interest rates rise by another quarter point, the market is likely to weaken quite rapidly from this point,” he added.
Although it is still early to speculate how the market will perform in November, it is expected more properties will be advertised for sale by the end of the month.
In the auction market alone, the REIV said another 3,600 properties will go under the hammer in Melbourne — the highest number in any month this year.
Australian Property Journal
