With over 1000 auctions last weekend, the clearance rates of the three main data collection companies have all come in at or just below 80%. The REIV, usually the highest data collection rate over the weekend came in with 939 auction results for a clearance rate of 78%. Please note, this means that all properties that sold under the hammer, sold prior to auction day and also passed in and were negotiated on the day, of which we had one, are reported as SOLD.
With interest rates at record lows, the Australian Dollar slowly falling back towards historically average rates and the massive influx of overseas buyers, local investors and first home buyers all trying to get into the market for different reasons, it would seem this steady high clearance rate will continue.
The next two weekends will see a very strong finish to the open auction season in Melbourne. With thousands of auctions and sales to occur between now and Easter, there will be some record sales in some areas, but just as likely there will be some very shrewd purchases. The key will be to assess the property accurately. Knowing what the property should be worth and then either stopping if the bidding flies past your comfort zone, or alternatively, knowing when to do a deal after a passed in property, will be the key to good buying this year.
We expect April to be a little slower than February and March. This is due to Easter, school holidays and Anzac Day taking up three of the four available Saturdays for auctions. April will likely be a “catch up” month where Estate Agents will try to clear what they already have on the books, in order to get a good jump on May. I expect May and June to be very busy months this year, unlike previous years.
As we move through the year the amount of passed in properties quite often increases as a percentage of total auction numbers. If you are bidding at an auction yourself, and you are the highest bidder at the end of the auction and yet the auctioneer has not put the property “on the market” you will then be back to one on one negotiation. Please note, according the Consumer Affairs website, the highest bidder gets the right to negotiate with the vendor, even if the property was subsequently passed in on a vendor bid. For more information about handling a pass in negotiation please read our article “A property Passes In at Auction…what do you do now?”
If you are considering a property purchase this year, please feel free to call for a no obligation meeting. It will be difficult to purchase property in the coming months due to the state of the market, but waiting for the market to “tone down” could cost you tens of thousands of dollars.
Ian James
Director
JPP Buyer Advocates