The onset of winter usually signals a change to Melbourne’s auction market, accordingly it is timely to review current market conditions.
Overall the auction market in Melbourne is solid and has returned to a sustainable level after reaching historical highs last year.
REIV data reveals that up to yesterday there have been 12,512 auctions this year of which 69 per cent have sold.
At the same time last year there had been 10,863 auctions with 83 per cent sold and in 2006 there had been 9,005 auctions with 71 per cent sold.
An interesting difference in the market has been the significantly higher number of auctions that have been passed in on vendor’s bid - a sign that vendor’s expectations are not being met and we are in a buyers market.
This year we have seen 22 per cent of auctions passed in on a vendor’s bid, compared with 10 per cent last year. Whilst this is a significant variation compared to last year, it is in line with 2006 when the figure was 19 per cent and 2005 when it was 21 per cent.
Another area of significant difference is in the number of auctions when the property was sold after the auction but on the same day. Last year there had been 441 sold after the auction but this year it is 209, another indication that last years sellers market has turned and buyers now have more ability to negotiate with vendors.
These results paint the picture that 2007 was an exceptionally strong market, a view that is confirmed by the results in the December and September quarters when the median price of a home increased by nearly $60,000 from $415,000 to $472,250.
