Melbourne’s late autumn weekend home auction market recorded a weaker result at the weekend, with no sign yet of an increase in buyer activity following last week’s cut in interest rates.
The Melbourne housing market reported a clearance rate of 73.1 percent on Saturday which was below the 75 per cent recorded the previous weekend and also below last year’s strong rate of 79.7 percent recorded over the same weekend.
Saturday’s result was the lowest recorded for the year so far, but only marginally below the autumn weekend average of 74.6 percent reported to date.
Autumn results continue to track in a narrow range, with a high of 76.3 percent and the low of 73.1 percent – providing some certainty and consistency for both buyers and sellers.
Auction numbers were well down on last Saturday’s record April offering of 1270 listings, with 912 homes scheduled to go under the hammer, providing a challenge to the market and a reasonable choice for buyers.
The most expensive property reported sold at auction was a four-bedroom home at 16 Vincent Street, Glen Iris, sold for $3.5 million by Kay and Burton.
The most affordable property reported sold was a two-bedroom unit at 3/68 Broadmeadows Road, Tullamarine, sold for $277,500 by Moonee Valley Real Estate.
Melbourne recorded a median auction price of $800,000 on Saturday which was higher than the $795,000 recorded the weekend before.
Saturday’s median was 2.8 percent higher than the $778,500 recorded over the same weekend last year.
A total of $371.0m was reported sold at auction in Melbourne at the weekend.
The marginally result at the weekend follows the Reserve Bank’s predictable decision last week to cut interest rates to a new record low 1.75 per cent.
Lower rates are a positive for both home buyers and mortgage holders — they improve housing affordability, lower repayments and notionally raise income levels.
The latest cut in official rates — now passed on by most banks to their customers — is likely to be followed with another cut.
The rising spectre of a looming deflationary spiral is now clearly focussing the immediate attention of Reserve Bank.
Lower mortgage rates will act to increase house prices although results will naturally differ from market to market.
The recent boom-time results of the Sydney and Melbourne markets however will not be repeated as consequence of the lower rates with increases likely to be moderate at best.
For a full list of the Melbourne auction results click here