Melbourne’s red-hot auction market in winter as lockdown does little to slow momentum
Melbourne’s fast-rising property market shows no sign of slowing over winter, with some real estate agents claiming the city’s most recent lockdown, coupled with restrictions on interstate travel, means Melbourne could experience one of its busiest winters in years.
Open-for-inspection numbers since Melbourne’s two-week lockdown eased on Thursday night indicate buyer demand is far from waning.
Domain figures show attendances at open for inspections jumped by 137 per cent last week, once the ban on inspections and public auctions had eased.
Many agents added extra open-for-inspection times on Friday lunchtime and Friday evening to allow buyers to inspect homes ahead of auctions scheduled for last weekend.
Meanwhile, new listings were up 44.2 per cent week-on-week.
There are 1472 auctions scheduled across Melbourne this Saturday. This compares with just 645 auctions for this weekend in 2019.
Last weekend, there were 591 auctions scheduled across Melbourne, despite the city coming out of lockdown less than 48 hours earlier.
Domain Group recorded a preliminary clearance rate of 62.0 per cent from 234 reported results while 70 auctions were withdrawn. Withdrawn auctions are counted as unsold properties when calculating the clearance rate.
Ray White Victoria and Tasmania chief executive Stephen Dullens said the two-week lockdown has had a “domino effect,” which meant Melbourne’s property market was unlikely to slow during July, which is typically a quieter period for auctions, particularly during the school holidays.
“Because a lot of sales campaigns got paused for a week or two, many auctions that were scheduled for early to mid-July will have been pushed back into mid to late July,” he said.
“While you generally see a slow down in early July, I’m not sure it will be as exaggerated as previous years,” he said.
“All those rules about when you take a home to auction have been thrown out the window. We saw the same thing in January this year when we had twice as many sales in January than normal,” he said.
Mr Dullens said his group alone had about 180 auctions scheduled for this weekend and more than 200 scheduled for the following weekend, the first weekend of the school holidays.
“I think the fact that in Victoria we will have less people travelling during the school holidays and online auctions are becoming less of a deterrent, that it could be busier than what we would normally tend to see at this time of year,” he said.
“Our inspection numbers were huge last weekend and have recovered to what they were three or four weeks ago,” he said. “And, we had an auction clearance rate of around 97 per cent.”
Mr Dullens said the end of stamp duty savings for properties under $1 million and the introduction of stamp duty hikes for property transactions above $2 million on July 1 were likely to add to a sense of urgency among some home buyers in the weeks to come.
“There is still a huge amount of demand from buyers and I think they’ll be out in force over the next couple of weeks, especially with those stamp duty deadlines looming,” he said.
The Agency’s general manager Victoria, Peter Kakos, said Melbourne’s most recent lockdown had little impact in terms of slowing the momentum of the city’s runaway property market.
“It hasn’t done anything in terms of halting the marketplace. It’s still very active. There’s still a lot of buyers out there and if anything we just saw a lot more off-market activity that happened during the lockdown,” he said.
“It obviously caused some frustration for buyers and sellers, but I think it’s also meant that buyers are making some pretty quick decisions.”
Mr Kakos said while the group had several auctions scheduled for this coming weekend, he expected the following weekend to be even busier.
“What we tended to do during lockdown was push some of our auctions back by a couple of weeks just to give buyers a bit more time to look at properties. So, next weekend is going to be a really busy weekend,” he said.
He believed a combination of strong buyer demand, coupled with vendors wanting to make the most of Melbourne’s strong market meant the typical winter slow down would not be as quiet as usual.
“We often see a bit of a push at this time of year because people want to get things done before the school holidays and winter’s starting to set in,” he said.
While many vendors typically spend winter preparing their homes for a spring auction, Mr Kakos believes this year, many vendors will be looking to bring their homes to the market “sooner rather than later”.
“I think this year, we might only have a week or two that’ll be quieter and we’ll have a lot of vendors looking to hit the market earlier than they normally would,” he said.
Ref: RACHEL WELLS (on 18 Jun 2021). Melbourne’s red-hot auction market in winter as lockdown does little to slow momentum. Retrieved from https://www.domain.com.au/news/winter-will-do-little-to-dampen-melbournes-hot-auction-market-1065014/.
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