Melbourne’s property market has taken a hammering, with less than one-in-two homes sold at auction this weekend.
MELBOURNE could see fewer homes going to auction and sales even more skewed towards buyers after it failed its biggest market test in six years.
Less than half of Melbourne’s auctions, 49 per cent, ended in a sale yesterday, according to preliminary CoreLogic figures.
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It was the second busiest auction weekend this year, with more than 1600 homes scheduled to go under the hammer, with further results yet to be disclosed.
It’s the second week clearances have dipped below 50 per cent during the busiest time of the year for home sales.
Melbourne’s auction market has seen better weather. Picture: Nicole Garmston
Next weekend will see a substantially smaller number of homes go to auction as the Melbourne Cup the following week deters homesellers.
However there is a silver lining with this week’s figure above the 46 per cent clearance rate recorded last week, the lowest since a 38 per cent result on the Queen’s Birthday long weekend in 2012.
CoreLogic Australian head of real estate Geoff White said while results were stronger in some suburbs than others — the soft clearance rates might see fewer homes going to auction by the end of the year as more homesellers considered private sales.
Many buyers are opting not to bid at auction and negotiating sales afterwards.
“Many (agents) will certainly suggest a couple of options to vendors now, whereas 12 or 18 months ago it would have been to go to auction,” Mr White said.
“Clearly the Melbourne market is susceptible to volume and the volume is not being matched by the demand of people attending auctions.”
The slump in clearance rates had largely been dictated by tighter lending conditions, putting the squeeze on homebuyer finances, he added.
Tougher lending criteria has left many buyers with lower budgets.
Real Estate Institute of Victoria president Robyn Waters said the preliminary figures showed things had stabilised, but were not good news for homesellers.
“Unfortunately there will be some disappointed vendors today,” Ms Waters said.
“Clearance rates remain stable and, although low compared to 2017 levels, there are definitely pockets of success in the auction market with clearance rates of more than 80 per cent in some suburbs.”
Advantage Property Consulting director Frank Valentic said consecutive weeks of clearance rates below 50 per cent had left buyers well and truly in control.
Those holding the cash hold the power in Melbourne’s property market right now.
“What this means is that we are definitely in a buyers market — and there will be a hell of a lot more opportunity for buyers,” Mr Valentic said.
“They will be able to pick the eyes out of the market.”
Buyers would increasingly find sellers willing to consider the bottom end of listed price ranges, he added.
National Property Buyers director Antony Bucello echoed the sentiment, and said it reflected a market cycle correction.
“Prices are coming back to where they should be,” Mr Bucello said.
The clearance rate was unlikely to decline further — or rise — before the end of the year.
“If you have got access to money, the next 12 months are going to be unique for buyers, but I don’t think this environment will last forever,” he said.
“It’s the perfect time to upsize. You will sell your property and you might get a little less, but you will benefit at the other end. You will pay less for a home, and less stamp duty.”