Spring buyers jumping on limited stock.
Over the 5 weekends of August more than 2,603 auctions were reported to the Real Estate Institute of Victoria (REIV). There were approximately 1,476 sales at auction. 505 properties were passed in with 232 of those on a vendor bid. The clearance rate averaged 76%, rising from July’s 73%.
Agents reported highly contested auctions in August with many sales shooting above reserve. Stock levels edged higher through the month of August but nowhere near the amount normally seen this close to Spring. The REIV expects just 7,000 homes will go to auction in the next three months, almost 4,000 less than this time last year (11,036) and 7,000 less than Spring 2017.
So the trend at auctions through August saw multiple bidders across Melbourne ready to buy and not holding back. This is a big turnaround from last year, when the clearance rate through Spring was below 50% for 9 weeks in a row.
People could see home values falling then but now the pendulum is swinging back and prices are rising. The market has been rewinding and demand is ramping up again as you would expect considering Melbourne’s high population growth. Around 130,000 new people arrive annually (McCrindle), equivalent to a city the size of Darwin being added every year.
The latest figures show Melbourne values lifted 2.4% in the last quarter (CoreLogoc), driven by buyers keen to get in while prices are still below the 2017 market peak.
Vendor Marketing recommends auction as the way to maximise the sale price for your home and the latest research from realestate.com.au confirms this. Melbourne houses sold by auction so far this year have fetched $931,545 on average, which is $200,000 more than those snapped up privately! So a home sold under the hammer is more likely to net a bigger price than a sale by private treaty.
Auctions have an atmosphere of urgency and brings out the competitiveness in buyers, especially when it’s a great home that has been well marketed and presented.
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