Best homes still in demand, despite slowing market.
Over June’s 5 Saturdays more than 3,532 auctions were reported to the Real Estate Institute of Victoria (REIV). More than 1,594 sales were recorded at auction. Approximately 1,166 properties were passed in, with 603 of those on a vendor bid. June’s clearance rate averaged 62% – down on May’s 64.5% and sharply down on June 2017’s 74%.
Clearance rates dropped in June, continuing to trend down, as the 2016-17 boom comes off its peak. According to market analysts CoreLogic, Melbourne’s median home value dropped another 0.3 per cent in June, which they claim is the seventh continual month of decline.
June’s Queen’s Birthday weekend was quiet with only 233 auctions reported, but the overall drop in auction numbers is typical for winter. Added to this, some sellers are reluctant to go to market in the current atmosphere of uncertainty.
Looking forward, the Melbourne market will continue to be divergent with some patches outperforming others. Perceptions that a particular area still presents value will keep demand high there. Essendon for example, because of its proximity to the CBD has been maintaining better clearance rates than many other inner-ring garden suburbs.
Agents across Melbourne are saying the best properties are still attracting keen interest, but anything with less than perfect presentation is likely to struggle. Never go to market without the right preparation!
Standing back though, analysts are heralding a 10% drop in Melbourne’s median home price before the market gets to the bottom of the current trough. This is much like after the 2008 peak, when values dropped by 10% over the following 11 months.
We heard a lot in 2017 about home sellers being surprised by getting a higher than expected sale price. But this year the surprise can be one of disappointment, if sellers’ expectations are higher than the 2018 market can deliver.
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