Stand by for spring’s first super Saturday as Melbourne Cup field emerges
Some 1,150 properties are set to go under the hammer on the October 27 weekend, marking Melbourne's first super Saturday since April and the biggest since December 2010.
Melbourne auction listings have been down this year as many owners turned to private sales due to a flat property market.
But the recent rise in clearance rates could signal a turning point, Robert Larocca of the Real Estate Institute of Victoria says. A clearance rate of 66% was recorded on the weekend, compared with 51% for the same weekend last year.
"There is a strong correlation between clearance rates and confidence levels," he told the audience at the weekend Melbourne Home Buyer and Property Investor Show.
"These two factors are linked so when we see confidence drop so to do clearance rates," he said.
"Clearance rates are a forward indicator of what's happening to sale prices – with the clearance rate providing an indication of what's likely to occur a few months later to prices.
"Right now we've seen a start in the rise to clearance rates, and that suggests, if history is any guide, that prices ought grow towards the end of this year and next year.
"That depends very much on the direction of the economy and also what's happening around the word," he advised.
"It's a sign of emerging confidence given the vendors held back in the earlier part of this year ... but we will soon see whether the gradual improvement in clearance rates are repeated and solid," Larocca said.
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Larocca said there had been little capital growth in the Melbourne market this year.
"The fact that prices haven't gone down this year is good news," he said.
The low sales volumes in Melbourne is apparent in REIV data that shows until the grand final weekend, there had been 18,433 auctions this year, with 11,132 or 60.4% selling under auction conditions.
This compares with the 22,247 auctions held up until the same time last year, when the clearance rate of 60.6% and 13,476 sold.
In 2010, when effective demand was much stronger, there had been 23,820 auctions and a clearance rate of 76.8%.
The volume of sales by auction is down 17% on this time last year and 39% on this time in 2010.
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October's opening weekend recorded 540 houses and units go under the hammer in Melbourne, according to the Real Estate Institute of Victoria, with a 60%-plus success rate.
Super Saturdays are the hyperbole for when there are more than 1,000 auctions scheduled for Melbourne and more than 700 in Sydney.
The last super Saturday auction weekend in both Sydney and Melbourne was on the weekend before Easter in March this year.
In the March super Saturday, Melbourne’s estate agents secured a 61% auction success rate, while Sydney’s result was 53.8% clearance rate.
According to Australian Property Monitors, the tally for Sydney's October 27 weekend is about 400.