Melbourne has just gone through its toughest spring auction market since the global financial crisis.
CoreLogic records show the last time the city’s clearance rate topped 50 per cent was October 14 — in the nine weeks since, less than half the 10,500 properties going to auction have sold.
While thousands of homes are still changing hands via private sale, the city’s auction market has had its worst run since CoreLogic auction records began in 2008.
The firm’s Australian head of real estate Geoff White said last weekend marked the first time every subregion across Melbourne had failed to top 50 per cent.
“It’s a run we haven’t had before,” Mr White said.
But homes are still selling, with auctions only accounting for about 20 per cent of the market. Excluding homes sold without a disclosed price, about 9230 have changed hands via private treaty since the start of spring.
The auction market, which has barely 160 auctions left before the end of the year, is believed to have been particularly susceptible to a tougher lending environment brought on by regulatory changes and the Royal Commission into financial services.
Major lenders can now take upwards of a month to approve loans for prospective buyers, leaving many unable to make unconditional offers until after an auction had been held, Mr White said.
“The timeline is really impacting auctions,” he said.
“There are buyers there, but they just can’t commit. And that’s the primary difference we are seeing.”
Real Estate Institute of Victoria figures backed the CoreLogic data and show that almost 6000 homes have sold under the hammer this year, compared to more than 10,000 last year.
Vice president Adam Docking said auction sales for houses were down about 46 per cent on last year.
“But we have seen the volume of auctions drop,” Mr Docking said.
“Some vendors are sitting and waiting to see where the market goes before they sell.”
Those holding off from selling might find a different market by next year.
“Generally we don’t carry negativity into the new year,” Mr Docking said.
For those looking to buy in the New Year, bidding at auction and having a home passed into you for exclusive negotiation still represented the most transparent way to buy a home, he added.