Year ends with a bang
MELBOURNE’S auction market is set to go out with a bang like a Christmas cracker, with 702 auctions scheduled this weekend.
While it’s a low volume compared to recent weeks, when more than 1500 properties were offered, it still represents a significant amount of property so close to Christmas.
The auction market strengthened last weekend, with CoreLogic RP Data recording a 67 per cent clearance rate, after collecting 1384 reported auction results.
However, the downward trend for auction success is the biggest indicator of slowing price growth for Melbourne’s property market next year.
CoreLogic senior research analyst Cameron Kusher said auction clearances had fallen 20 percentage points from their April peak, when 86.6 per cent of properties sold.
“You can’t see a fall in clearance rates of more than 20 per cent without it impacting on the rate of value growth in the market,” Mr Kusher said.
He said several other factors also pointed to slower growth next year, including building approvals and construction of new dwellings pushing more supply into the market, while an easing of population growth had reduced demand.
Investors were also starting to feel the pinch, with falling growth in rental rates squeezing yields. Tighter lending restrictions on investment loans and recent rate hikes independent of the Reserve Bank had added to the cost of borrowing.
“It is still unclear whether values will continue to fall but what is clear is that the rate of value growth is slowing and is likely to continue to do so,” Mr Kusher.
But Ray White, Manningham, director Frank Perri said good property in good suburbs remained a constant in the market.
Mr Perri auctioned last weekend’s top sale, the fivebedroom home on 0.5ha at 28 Serpells Rd, Templestowe, for $4.868 million.
But he said it was hard work to coax bidding toward the $4.3 million reserve as the auction stalled at $3.9 million.
“It was probably at least four times on the verge of passing in,” he said.
Two bidders broke the deadlock, taking the price $568,000 above the reserve price in a 50-minute marathon.
Last weekend’s most expensive auction sale, on Serpells Rd in Templestowe, sold for $4.868m.