After another big weekend of auctions the reported clearance rate actually dipped below the 80% mark for the first time in quite a while. I don’t think there is any single reason for this issue and I also do not think this is going to herald a change to the auction results around Melbourne.
The key factors that can have an effect on the clearance rates are market sentiment and supply. Whilst we had about 1600 properties sold throughout the week, only 536 of them sold at auction on the day. Many of these would also have passed in and been negotiated within the hour and listed as sold. So supply is up.
We have an election looming in a couple of weeks which always has a few people nervous. Most people I have spoken to have the idea that there will be a change of Government.
Interest rates went up last week and the market below the Melbourne median Price will be most affected.
Christmas is Just around the corner, and if the Real Estate Agents want a full three week campaign then this week is the last week for new auction listings for the year.
These are just a few of the reasons that affect the clearance rate. And they do so differently. Those people who have already resigned themselves to a change of Government are not worried about the election, the swinging voters probably are. Interest rates affect those who are borrowing a larger percentage of the purchase price. So those that have 20% or more equity aren’t usually as perturbed. Christmas simply means there will be a slow down for 4 weeks. I think we will see a lot of “forthcoming auctions” over Christmas. This is a way for the agents to advertise their February properties early.
I think we will see another huge weekend before a drop for the election then two more big weekends in December before the break.
Ian James