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Melbourne auctions: Confidence building in property market

Real estate & property news
05 May 2023
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Melbourne has “turned a corner”, with sentiment improving heading into the final month of autumn.

Confidence is building in the Melbourne property market heading into the final month of autumn.

Real estate groups across the city have noticed green shoots at auctions in recent weeks, with clearance rates strong and continuing to improve.

PropTrack recorded a clearance rate of 68 per cent from 539 reported results last week, with Ray White and Barry Plant also noting clearances of about 80 per cent recently.

A pause in the raising of the cash rate by the Reserve Bank of Australia has given buyers a bit more confidence, industry players say, with low stock favouring sellers.

McGrath Northcote agent Luke Brizzi said this shortage was “a big thing”, with four bidders pushing the four-bedroom house at 29 Speight St, Thornbury, $108,000 beyond reserve.

It fetched $1.538m after being advertised for $1.3m-$1.38m.

“The location and potential of what you could do with the house were major drawcards,” he said.

“It was renovated so you could move straight in and do nothing, but it’s a very deep block so you could potentially go out to the side, out the back, or up, and do all sorts of things, and it’s a prime spot.”

Mr Brizzi said the bidders were “majority first-home buyers”, including the buyers who had a buyer’s agent representing them and would relocate from Richmond.

Barry Plant chief executive Mike McCarthy said buyers had also adjusted their budgets to the new interest rate environment.

“People who were looking at $1.5m might now be looking at $1.2m, people at $1.2m now looking at $1.1m et cetera, so the level of demand has moved down, perhaps, but buyers are there,” he said.

His group had a raft of strong sales across the weekend, including two state government owned properties: a three-bedroom house at 52 Goulburn Ave, Reservoir, which sold for $810,000 from a reserve of $750,000, and a three-bedroom house at 36 Ruby St, Preston, which sold for $965,000 from a reserve of $870,000.

Four bidders competed for each, while a third property the group was selling on behalf of the government passed in.

Ray White Victoria chief auctioneer Jeremy Tyrrell said he thought the market had “turned a corner” since Easter.
“We’ve just seen the numbers at auction have improved, with buyer sentiment, good registration of bidders, good activity at auction and stronger clearance rates,” he said.

He said the rate rise pause had inspired confidence, and shortage of stock and migration were working in sellers’ favour.

Mr Tyrrell auctioned the five-bedroom house at 16 Seaview Point, Point Cook, that was shooting to be one of the suburb’s priciest sales with a guide of $3.7m-$4m.

But Ray White Point Cook agent Deepak Devaraj said it had turned into a private sale this week with negotiations still underway.

Wakelin Property Advisory buyer’s advocate Jarrod McCabe said it was not likely there would be a drastic increase in supply until spring, which would underpin the market further. “Demand is going to continue to be a bit pent up, so we’ll see what happens come the spring market, which will give a bit more time for interest rates to continue to stabilise a little bit. “By the time the spring market comes around they could even start to reduce so that could really give the market a bit of a kick.”


Real estate & property news
05 May 2023
Save Article

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