Melbourne buyers panic as homes sell before auction – realestate.com.au

From the backyards of Brighton to the terraces of Brunswick, more and more Melbourne homes are being sold before the auctioneer takes the stage, as confident sellers cash in early and buyers desperate to beat the next price rise make bold midweek offers.

PropTrack data shows there are 1,181 auctions scheduled in the city this week, and another 1,204 next week.

The clearance rate remains near 75 percent, which some consider one of the strongest spring results, indicating that the city’s housing recovery is now well underway.

PropTrack senior economist Angus Moore said the Melbourne market had clearly turned the corner after two slow years.

“Market conditions are much firmer than they have been for quite some time,” Moore said.
“Clearance rates have been high and, perhaps more importantly, prices are now showing steady, consistent growth. That’s a real change from 2022 and 2023, when prices were flat or falling.”

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PropTrack economist Angus Moore

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Rate cuts have increased borrowing power and confidence across the board, Moore said.

“It usually takes a few months for rate changes to reflect on sales data,” he said.

“But the market tends to anticipate it in advance.
“That’s what we see now, stronger expectations that feed into the activity.”

While economists point to firmer fundamentals, Melbourne buyer advocate Simon Murphy said competition on the ground has become cutthroat, fueling a surge in pre-auction sales.

“If someone falls in love with a property, he or she will still make a move, that hasn’t changed,” Murphy said.
“But most buyers miss out. Auctions regularly go $200,000 to $300,000 above reserve or above advertised range, so people try to get in before that happens.”

Mr Murphy said many sellers chose the certainty of an early offer rather than gamble on Saturday’s crowd.

“Sometimes the agent simply miscalculates the price from the start,” he said.
“Then an offer comes close to or above the margin and the seller takes the safe bet.
“Every decision is a gamble. Could they have gotten more? Maybe. But they want certainty.”

Melbourne Property calls for director Simon Murphy

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The most intense bidding occurred in the sub-$1.5 million category, where homes were almost guaranteed to reach the top of their listed range, Mr. Murphy said.

“That’s the new normal,” he said.
“Any property auctioned now is virtually guaranteed to go $200,000 or $300,000 over range.”

Mr Murphy also said chronic underquotations across the state were also eroding confidence.

“Let’s be honest: there is no more trust. If Consumer Affairs were to enforce the fines properly, we would all know about it. But they are focused on other things.
“Yet confidence is returning, all quality properties are being sold quickly.
“The difference now is that people are no longer afraid, they just want to lock in something before the next price increases happen.”

With rate cuts taking hold and spring listings rising, agents expect the city’s auction heat to continue through November as Melbourne’s comeback gathers pace.

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david.bonaddio@news.com.au