Winter ends with low clearance rates. Will Spring warm up the market?
Over the four weekends of August more than 2,586 auctions were reported to the Real Estate Institute of Victoria (REIV). More than 1,104 sales were recorded. Approximately 910 properties were passed in, with 480 of those on a vendor bid. August’s clearance rate averaged 60.25% – down on July’s 62%.
The number of properties going to auction lifted a bit across winter’s last month, but clearance rates dropped lower than July. CoreLogic claimed clearance rates dipped to 54% on the weekend of 18th/19th August (the lowest point since December 2012), but the REIV differed, putting the figure for that weekend at 58%. Very cold wintry weather may have played a role in the low turnout by bidders.
But Real Estate Agents claim there’s an increasing trend for homes to sell prior to auction, or through off-market or private negotiations – which helps drive clearance rates down. First Home Buyers helped buoy the market in August grabbing properties under $600,000, even small apartments in suburbs like fashionable St Kilda and Hawthorn. Millennial’s seem to be getting a grip on the real-estate-ladder picture at last – that is, you have to start somewhere, then work your way up!
Dwelling values in Melbourne have dropped from the November 2017 peak by -2.9%, to July 2018. But the falls differ by district, with many blue-chip areas feeling the pinch the most. The Inner-East is down -6.3% and the Inner- South down by -4.5%.
On the brighter side for Melbourne the Mornington Peninsula has weathered the storm very well falling by only .9% and ditto for Melbourne’s West.
As we’ve pointed out before, Melbourne’s averaged home-value drop is mild so far compared with other recent downturns, like the Global Financial Crisis in 2008 when Melbourne averaged values dropped by 9.4% and the 2011 economic downturn when values dropped by 8.4%. But Spring’s magic is on the doorstep and that means revitalisation…. and hopefully a shot in the arm for the market.
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