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Property Market | Buyer Enthusiasm Unaffected by Lockdown! Melbourne’s Auction Clearance Rate Rebounds!

During the first weekend following the implementation of Stage 4 restrictions, Melbourne witnessed a preliminary auction clearance rate of 73%. Despite the increased uncertainty caused by strict limitations, many sellers brought forward their auction plans.

According to data from real estate research company CoreLogic, the national preliminary auction clearance rate reached 65.9% last week. Among them, Melbourne stood as the second strongest performing city for housing auctions. Out of the 298 properties listed for sale this week, 178 have already been sold.

However, the auction volume experienced a significant decline due to the ban on in-person sales. The number of properties available for auction, which stood at 357 last week and 500 during the same period last year, dropped to 298.

It is understood that within the next six weeks, Victoria’s real estate industry will be effectively “shut down,” with only virtual inspections and auctions permitted.

Approximately 18% of properties have been withdrawn, postponed, or converted to private sales—a notable decrease compared to the peak of 65% during the second week of the initial ban in April.

Tim Lawless, the research director at CoreLogic, stated that despite the stricter restrictions, Melbourne’s market seems to be holding up relatively well. He said, “Considering the economic uncertainty and potential buyers’ inability to physically inspect properties or participate in on-site auctions, this is an impressive result. We haven’t seen the level of withdrawal seen during the first lockdown, which might indicate that real estate agents have transitioned more quickly to the virtual auction environment, and auction buyers may also feel more confident about it.”

Sydney, on the other hand, currently has the highest number of auctions, with a clearance rate of 65.8% out of 642 auctions last week. This rate not only surpassed the 566 properties cleared the previous week but also exceeded the 367 properties from the same period last year.

Canberra maintained its position as the strongest market, achieving a clearance rate of 73.2% for 53 homes listed for sale.

In smaller property markets, Adelaide recorded a clearance rate of 71.4% for 45 properties, followed by Brisbane (46.8%, 105 auctions), and Perth (22.2%, 17 auctions).

 

According to Matt Condon, the Chief Auctioneer of Ray White Victoria, the restrictions have reduced the number of potential buyers, stating, “We anticipate auction volumes to be similar to last week for the next two weeks.”

However, Cate Bakos from Cate Bakos Property in Melbourne expressed that the current demand from potential buyers has been suppressed, which may lead to future price increases. She stated, “If the supply of homes remains limited in spring, we can expect fierce competition, and we may witness slight price increases.”

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