The Melbourne property market is confirmed to be in a cooling condition due to the drop in auction clearance rates in many suburbs since the start of the year. Data collected by the Domain Group from January to March shows clearance rates were lower compared to the same months in 2017.
In some suburbs, the clearance rate was just a little above 50 percent while across Melbourne, the rates fluctuated between 64 and 70 percent this year. There were certain suburbs where more than half of all properties failed to sell during auctions. These include Altona, Balwyn, Berwick, Chadstone, Mont Albert, Springvale and Sunshine West.
Clearance rates have dropped significantly in several suburbs in the first quarter of the year. Camberwell, for example, recorded a 54.7 percent rate from 79.4 percent during the same period in 2017. In Dingley Village in Melbourne’s south east, the rate fell from 95.5 percent last year to just 50 percent this 2018. Newport followed a similar trend with its clearance rate falling from 85.7 percent in 2017 to 56.9 percent this year.
According to the experts, this scenario is proof of a more balance property market following last year’s strong auction activity that mostly favoured home sellers. The tightening of investor lending and crackdowns on overseas buyers initiated by the federal and state government have also resulted in more properties being passed in during auctions.
Auctioneers have also reported fewer bidders on the ground except at entry-level and affordable properties. They said last year during this time, properties would normally attract from five to 10 buyers. Recently, though, an auction would only have an average of two to four buyers.
While the Melbourne market is cooling, Ben Kingsley, chief executive of buyer advocacy firm Empower Wealth, said there is no need to worry. He stressed the market is only showing more balance at the moement and does not necessarily require a correction.
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By Wendy Chamberlain
Copyright 2018 | All Rights Reserved
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