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Rate cut keeps auction market at highest levels in five years

Melbourne recorded a clearance rate of 79.7 per cent on Saturday, following the previous weekend’s non-holiday result of 82.1 per cent, which was a high for the year. 

Solid auction numbers continue to test the Melbourne market, with 919 homes scheduled to go under the hammer at the weekend. This was below the previous weekend’s 983 but well ahead of the 603 auctions conducted over the same weekend last year.

Latest Domain Group data reports that the number of suburbs in Melbourne with a median house price of $1 million or more increased from 48 to 56 – or one in every eight suburbs – over the six months ending March compared to the previous six months.  Reflecting the strength of the outer eastern suburban market, new entrants to the million-dollar club included the popular suburbs of Doncaster, Glen Waverley and Mount Waverley.

The suburban regions produced mixed results at the weekend, but the outer east recorded yet another extraordinary result with a 92.4 per cent clearance rate. The outer east continues to produce clearance rates above 90 per cent each weekend, reflecting a market that has experienced boom-time conditions over the past year or more.

The inner south produced the next highest regional clearance rate with 87.1 per cent, followed by the north 80.8 per cent, the south east 80 per cent, the inner east 78.9 per cent, the north east 76.9 per cent, the inner city 76.4 per cent and the west 71.4 per cent. 

Notable sales reported at the weekend included a three-bedroom home at 11 Flintoft Avenue, Toorak, sold for $4.35 million by Marshall White; a nine-bedroom home at 53-63 Bridge Street, Port Melbourne, sold for $3.69 million by Hocking Stuart; a six-bedroom home at 11 Peppin Street, Camberwell, sold by Melbourne Deluxe Real Estate for $3.51 million; and a five-bedroom home at 15 Bridge Street, Hampton, sold by Marshall White for $3.1 million. 

Melbourne recorded a clearance rate of 79.7 per cent on Saturday.

Melbourne recorded a clearance rate of 79.7 per cent on Saturday. Photo: Supplied

The most expensive property reported sold at auction at the weekend was a four-bedroom home at 40 Anderson Road, Hawthorn East, sold for $4.82 million by Marshall White. The most affordable property sold at the weekend was a three-bedroom home at 3 Crossley Crescent, Coolaroo, sold by Barry Plant Glenroy for $235,000.

Lower interest rates will improve affordability and confidence in the housing market, although the latest unemployment data has vindicated the somewhat surprising decision by the Reserve Bank to cut rates last week.

The national unemployment rate increased from 6.1 per cent to 6.2 per cent, with the Victorian rate steady at 6.2 per cent.

Auction results for May 9, 2015.

Auction results for May 9, 2015. Photo: Supplied

All eyes will be on next week’s federal budget that will reveal the government’s initiatives to manage what is a high and rising budget deficit. The response to the budget will be an important factor for housing market sentiment moving into winter, notwithstanding the positives of lower mortgage rates.

For a list of weekend auction results in Melbourne click here.

Dr Andrew Wilson is Domain Group Senior Economist Twitter @DocAndrewWilson




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