Melbourne's auction season swings back into action with ferocity: Greville Pabst
GUEST OBSERVATION
According to preliminary auction results, there were a reported 852 residential properties auctioned in Melbourne at the weekend, 76% or 494 of these selling.
Total auction volumes included 520 houses and 316 apartments, with clearance rates of 81% and 71% respectively. The balance of auctions consisted of vacant land sales.
The highly anticipated unofficial opening of Melbourne’s real estate auction calendar occurred at the weekend, and, as predicted by WBP’s property advisers, with as much ferocity as it closed in December last year.
The keen interest observed at open for inspections and the market’s handful of auctions in January and early February converted to participation at the weekend, with a multitude of bidders driving strong outcomes for many properties across Melbourne. And, the results are telling.
A clearance rate of 76% signifies over three quarters of vendors received an offer to purchase their property either equal to or exceeding their expectations. This demonstrates high confidence levels among both buyers and sellers – a factor that will continue to drive market performance until the Easter period, in the least, particularly following the RBA’s surprise cut to already record low interest rates earlier this month.
It’s interesting to note the consistency of performance across Melbourne’s metropolitan market. All residential markets, ranging from the city’s outer east to the west are clearing at rates higher than this same time last year. But still, Melbourne’s litmus suburbs experienced mixed results – Richmond showed a strong clearance rate, commanding strong prices for quality properties, while reservoir cleared at lower rates with just half of auctioned properties transacting.
Other standout performer was St Kilda, due partly to a proportion of properties selling prior to auction. It’s not unusual for many properties to transact prior to auction in January and February amid concerns the market may not meet vendor price expectations prior to buyer interest peaking. This trend is likely to dissipate over coming weeks as markets heat up and vendors feel more at ease.
The Melbourne market has opened strongly overall, however, micro level analysis continues to demonstrate not all properties perform the same. Don’t rely heavily of macro property statistics when selecting a home or investment property. Instead, investigate the individual asset’s long-term performance as a gauge of future expectations.
Greville Pabst is CEO of WBP Property Group.