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Slight dip in clearance rate as some vendors become ambitious with setting reserves

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June 28, 2021

Hi,

Auction numbers were high on the weekend with 958 auctions across Melbourne.  606 sold at auction, 150 sold before auction, 202 passed in and there were an additional 158 private sales.

Over the past two weeks, we have seen real a disconnect in some agents price guides and reserve prices.  A few of years ago this would be have an intentional act by some selling agents quoting the property lower to generate buyer interest.  However, I don’t believe this is currently the case.  It seems that some vendors are becoming overly excited about the sales results of other properties and setting high reserves on the day of auction.  I even attended an auction where the vendor instructed the agent to just pass the property in, regardless of where the bidding landed.  I have witnessed some agents frustrated by this and I believe that is why we have seen a slight dip in the clearance rate.  Not due to lack of buyer interest, but due to some vendors being overambitious on their price expectations.

We attended some very competitive auctions on the weekend with the auction of 267 Clarke Street, Northcote being one of them.  This unrenovated three bedroom, one bathroom California Bungalow on 529 sqm with rear laneway access.  The property was quoted at $1,800,000 to $2,000,000 before auction and had generated serious interest with many buyers inspecting the property throughout the sales campaign.  The auction commenced on a genuine bid of $1,800,000 from one party with another four bidders jumping in to try and secure the home.  The property was announced on the market at $2,000,000 and sold for a huge $2,415,000.  The bidders were all young, professional couples and families.

The auction of 942 Lygon Street, Carlton North which is an unrenovated but impressive Victorian terrace was also very well attended and was quoted before auction for $1,550,000 to $1,705,000.  A strong opening bid of $1,650,000 started the auction off with another four bidders participating where the property was announced on the market at $1,700,000.  The property sold for $2,156,000.  A very big result for the vendor and whilst the property had an incredible facade, it did require a lot of work and was located on a busy, main road.

Have a great week.

Kim Easterbrook

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