The clearance rate dropped to 71% over the weekend with 555 auctions reported to the REIV. 395 properties sold with 319 being at auction, 76 before auction and 160 properties passed in. There were an additional 110 private sales. As a comparison, for the same time last year, the clearance rate was 69% on 503 auctions.
Whilst demand for property is still strong, there are varying price points where the demand is strongest and weakest. The sub $2m market is the strongest price point as a direct result of interest rate rises and increased cost of living. Banks assessment rates have increased dramatically over the past 12 months which has affected how much a buyer can borrow to purchase a property. Reports from selling agents are consistent across the board with the amount buyers with $4m plus budgets reducing and buyers with sub $2m increasing. That being said, there is still a constant demand for good quality family homes in the inner/middle ring of Melbourne.
The auction of 18 Belson Street, Malvern East is a good example this. The well located, four bedroom, four bathroom period home which has been well renovated throughout was quoted for $6,000,000 to $6,400,000 prior to auction. The auction had 3 active bidders and one could argue, had this gone to market say 12-14 months ago, there would have likely been more parties there to bid. The auction still produced a solid result selling for $6,605,000 with the property being announced on the market at $6,500,000.
A huge result in Pascoe Vale South with a three bedroom, one bathroom 1950’s home on 533 sqm of land selling under the hammer well above reserve. The property was quoted prior to auction for $1,250,000 to $1,350,000 with the bidding commencing at the bottom of the range. Three bidders participated in the auction pushing the price to $1,640,000 which was almost $300,000 over reserve.