Auction activity and clearance rates in Melbourne remain strong, despite a small dip in the volume of properties going under the hammer.
CoreLogic has revealed the city of Melbourne recorded an auction clearance rate of 68.4% for the second week in October as 731 properties went to auction last week, down from 833 from the previous week.
However, this figure was a 533.1% increase from the previous week (130) when two consecutive public holidays led to an extended long weekend across the city. In October 2021, Melbourne’s auction clearance rate was 85.3% when the city experienced a property boom.
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The south east region has recorded the highest auction clearance rate of 71.4%, followed by the north west at 68.7%, the outer east at 68.6% and inner east at 68.5%.
Melbourne finance broker Alma Zubovic (pictured above left), from Avondale Heights brokerage Loan Link said she had noticed an increase in local listings of late as well as higher auction attendance and interest in open homes.
“I think this is also reflected in the recent increase in the number of purchase applications I have been assisting my clients with,” Zubovic said.
“This is most definitely attributed to the typical ‘spring selling season’. It is common knowledge that spring is widely regarded as the ideal time to send your property to market as the warmer weather brings out more buyers which can also see higher sales prices due to the increased demand in the market.”
Zubovic said she was currently assisting her clients purchase small-to-medium-sized homes and townhouses.
“I have also seen an influx of first home buyers pursuing the route of building their first home, despite some of the well-documented challenges with construction at present,” she said.
Read more: Sydney house prices to plummet by end of 2023
“As widely publicised, there has been some buyer hesitancy with the continuous increases to interest rates, which has in turn impacted property prices, notably in more affluent suburbs.
“Despite the latest RBA decision to increase rates for a sixth consecutive month, borrowing capacity has quite significantly been affected over the recent months, so it will be interesting to see if buyer sentiment remains consistent given tighter lending criteria across lenders.”
CoreLogic economist Kaytlin Ezzy (pictured above right) said Melbourne once again was the busiest auction capital for the second week of October.
“Of the 619 auction results collected so far, Melbourne recorded its highest preliminary clearance rate since early May,” Ezzy said.
“The previous week recorded a preliminary clearance rate of 64.3%, while 77.3% of auctions held this time last year were successful.”
Ezzy said auction activity was on the rise across all major capital cities.
“After being impacted by multiple public holidays over the past few weeks, there were 1,799 capital city homes that went under the hammer this week, up 11.2% from the 1,618 auctions held last week and 36.7% above the 1,316 homes auctioned the week prior,” she said.
“With 1,441 results collected so far, the combined capitals preliminary clearance rate held above 60% for the sixth consecutive week at 63.4%, the highest level since late May (63.7%).”
Ezzy said Sydney hosted 686 auctions last week, up 41.7% from the week prior.
“With 545 results collected so far, Sydney’s preliminary clearance rate rose from 60.4% last week to 61.3% this week and this was its highest preliminary clearance rate since mid-August (63.4%),” she said.
“Despite the rise in the preliminary clearance rate, Sydney’s withdrawal rate rose from 17% last week to 21.1% this week, while the portion of properties passed in at auction fell to its lowest rate since early March to 17.6%.”
Ezzy said compared to the previous week, auction activity rose across Canberra (+86.9%), Adelaide (+44.0%) and Brisbane (+5.1%), however fell across Perth (-47.4%).
“Adelaide held 144 auctions, Brisbane held 124 and Canberra held 114,” she said.
“Canberra’s preliminary clearance rate rose above 70% for the first time since early June (71.1%), with 70.9% of auctions reporting a successful result, while Adelaide’s and Brisbane’s preliminary clearance rate came in at 69.7% and 49.4% respectively. In Perth, 10 homes went to auction this week and so far, only one has returned a successful result.”
