Auction Market Trends: Comparing Current and Historical Data

Current auction market trends in Melbourne show struggles attributed to sellers chasing prices beyond what buyers are prepared to pay, according to a leading auctioneer News.com.au. Victoria recorded a preliminary 62.8 per cent clearance rate on Saturday, with 236 sales from 376 reported results News.com.au. Of the 774 Melbourne auctions scheduled for the week, 56 per cent fewer were scheduled compared to a year earlier News.com.au.

Seller Behavior vs. Market Reality

Luke Banitsiotis, chief auctioneer for Ray White Victoria and Tasmania, warned that vendors were still expecting more than buyers were prepared to pay, stating that sellers were trying to overshoot the market News.com.au.

Impact of Reserve Price Laws

Under Victoria’s new laws, sellers must disclose their reserve at least seven days before auction News.com.au. Mr Banitsiotis noted that owners setting the reserve in line with buyer feedback attracted four or five bidders, describing published reserves as a “magnet” News.com.au. Figures supplied by Mr Banitsiotis showed that the share of auctions switching to private sales eased from 11.8 per cent to 10.5 per cent since the changes, though same-day clearance fell from 54.7 per cent to 40.7 per cent across the measured periods News.com.au.

What This Means for Buyers

Melbourne buyer’s advocate Cate Bakos reported not having an auction appointment on her first October Saturday, which was normally her busiest month News.com.au. While renovated family homes still attracted competition, well-located properties needing work presented opportunities for buyers News.com.au. For instance, at 38 Alfred St, North Melbourne, three families pushed a four-bedroom home to $1.506m, which was $256,000 above its published reserve, after opening at $1.14m with a $1.2m vendor bid News.com.au. Conversely, at 26 Marsh St, Maidstone, a family paid $960,000 for a home with a published reserve of $910,000 News.com.au.

Our view is that the new reserve disclosure laws, when adhered to by sellers, appear to foster more targeted bidding rather than simply inflating expectations beyond market capacity.

Real estate market regulation and property law are key aspects of government policy.

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