Confidence returns to Melbourne’s auction market, pundits suggest, in second-biggest weekend of the year
Post date: 03:38:42 27-05-2019
Theage.com.auBigger crowds and optimistic buyers marked auctions across Melbourne at the weekend, the first since the re-election of the Coalition that pundits say has contributed to a feeling of confidence.
On Saturday, 865 auctions were held across the city, the second-largest number of auctions in Melbourne so far this year.
Domain economist Trent Wiltshire said the Coalition’s win coupled with the Reserve Bank’s hints of interest rate cuts and the loosening of lending criteria – which will enable people to borrow more – added to a more buoyant weekend.
“These factors likely contributed to the preliminary clearance rate we saw on Saturday of 60 percent which will be revised down to about 50 percent,” Mr. Wiltshire said.
“It is a little bit higher than it has been for the past six months, which is a tentative sign that the market may be close to bottoming out.”
While agents were happy to see more people returning to the property market, it wasn’t translating to runaway prices.
Biggin and Scott Richmond director and auctioneer Russell Cambridge said agents were seeing more bidders turning up to auctions giving them “spring in their step”.
“What we noticed is that there were a lot of people out there, but it didn’t result in better bidding,” Cambridge said.
Half of the properties Biggin and Scott Richmond had for auction on the weekend sold and a half passed in.
“We got offers on all the others and we’re expecting to sell 100 percent in the next four days,” Cambridge said. “We’re not seeing any runaway prices, but they are selling.”
An auction at 26 Workers Lane, Richmond, attracted a crowd of 85. Bidders ensured a “cracking result” with the three-bedroom, two-bathroom townhouse selling for $1.01 million.
Marshall White director and auctioneer John Bongiorno said the confidence of agents and buyers was returning following the election result and news of loosening lending criteria and possible interest rate drops.
“There is a lot more positivity – a noticeable feeling of optimism,” Bongiorno said.
A big crowd turned out to an auction in a tightly held part of Armadale, at 12 Royal Crescent. The four-bedroom property sold under the hammer for $3.48 million.
Also attracting a big crowd of about 90 was an auction at 17 Range Road, Burwood East. Four bidders fought it out for the four-bedroom, two-bathroom property which sold for $1.1 million to a young couple. The final price was $40,000 above the reserve.
Selling agent Allan Smith, of Ray White Blackburn, said it was one of five auctions held by his office at the weekend, with all properties selling.
“A lot of first-home buyers are back in the market,” he said.
Smith said he expected more homes to come on the market given the election was over.
“Quite a few vendors have been hanging on to see what happened,” he said. “They realize the correction has [happened] and the market should plateau from now on.”
Advantage Property Consulting buyers’ advocate Frank Valentic said there were sales and pass-ins for the auctions he attended, but all eventually sold.
“It seems like there’s a bit more confidence in the market – every auction we saw pass in sold afterward,” Valentic said.
At an auction at 20 Carrigal Street, Balwyn, several bidders pushed up the price to $1.68 million, but it wasn’t enough to sell under the hammer.
An older couple bought the four-bedroom, three-bathroom home, for $1.725 million after it passed in. The couple wanted to buy into the much-desired area.
Another at 97 Danks Street in Albert Park attracted a huge crowd of more than 90. Six bidders competed with one buyer, an older man, making the final winning bid of $1.7 million.
While agents are relieved the election is over, they are now waiting to see the impact the Victorian budget, due out Monday, may have on the market.
Some are concerned it will further hamper sales due to the proposed tax hikes on property investors including foreign investors.