More than 160 sellers in Melbourne withdrew auctions as buyers turned cautious ahead of the next interest rate call.
Private sales are replacing the auction hammer in Melbourne as 164 sellers have withdrawn their offers amid renewed rate hike nerves.
PropTrack data shows Melbourne recorded a 68.6 per cent clearance rate this week, with 653 results reported and 164 recordings.
The jump signals that more and more sellers are opting for private sales campaigns rather than risk the public being hammered, as uncertainty increases ahead of the upcoming interest rate call in four weeks’ time.
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Nick Johnstone director Nick Johnstone said the softer auction mood was landing at the same time that buyers were being offered real value in the best pockets, with prestige family homes on substantial land sales below the peak.
“Properties in the $3 to $4 million range, which might have cost $4 million to $5 million a few years ago, have seen a correction of 10 to 15 percent,” Johnstone said Monday.
“That’s meaningful value. If you can secure a quality home on a large piece of land in a budget pocket, you’re buying strong fundamentals at a discount to peak.”
Mr Johnstone said auction energy had collapsed even as private sales continued to move.
Nick Johnstone says prestige homes in Melbourne are trading 10 to 15 per cent below peak, creating rare buying opportunities. Photo: Jake Nowakowski
“There was definitely an atmosphere in the air,” he said.
“We have had a very strong week with private sales, but the auction market has lost momentum.
“Buyers are cautious.”
He said Melbourne had been flat for about two years and history showed prolonged slow periods could be followed by sharp rebounds once confidence returned.
“I remember the GFC period in 2008, we had about six quiet months, and then 2009 went completely crazy,” Mr Johnstone said.
“We are the only state where prices have not increased aggressively.
“That’s why interstate buyers are circling here, they see the relative value here.”
Damian Medici says talk of rate hikes is changing sentiment, but hesitation could create leverage for decisive buyers.
Auction energy has waned across Melbourne with fewer bidders competing under the hammer this month.
Margin Finance director Damian Medici said the take-up figure was a sign that agents were reading the room and managing their campaigns accordingly.
“Every time there is a rate hike, sentiment changes and people pause,” Medici said.
“It’s about protecting the seller. No agent wants to put a property up for auction knowing it won’t go under the hammer.”
But Mr. Medici said these pauses could create leverage for owner-occupiers willing to act as the competition thins.
“Ironically, that’s often when the best opportunities arise,” he said.
Ray White Bayside Group director Kevin Chokshi warns that buyers who wait for certainty risk missing out, with many homes still selling within 10 days.
Ray White Bayside agent Kevin Chokshi said the auction figures did not reflect the full level of demand as many homes were still expected to trade shortly after Saturday.
“Many of the properties coming in today will still be sold in 10 days,” Chokshi said.
His advice to buyers across Melbourne deciding whether to wait for the Reserve Bank’s decision in March was blunt.
“Hesitation equals heartbreak.”
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