If you’ve been following the auction clearance rates in Melbourne, you’ll know that they have been trending upwards over the past few months, fuelling the growing perception that the property market has begun rebounding after the correction that began in late 2017.
Some market commentators have been saying that the rise in auction clearance rates is purely a reflection of lower levels of property on the market. However, one of the key analysts at a leading property monitor has suggested that the stronger auction results are indeed a sign of a market turnaround.
Recent research by Trent Wiltshire, an economist at Domain, indicated that the stronger auction clearance rates over the past two months are not the result of low real estate stock levels. In July the auction clearance rates in Melbourne averaged 67% in Melbourne, and those rates have climbed into the 70’s in August.
Mr Wiltshire was quoted on the Domain website this week as saying, “There’s been commentary suggesting that clearance rates have been boosted by the low number of auctions. Historically, that hasn’t been the case.”
Mr Wiltshire’s research looked at monthly clearance rates since 2005 and found the opposite to be true; months with more auctions had higher clearance rates. While there were some months or weeks that had low numbers of auctions and high clearance rates, the research showed this was not typical.
“Regardless of the number of auctions being held, clearance rates are still a timely and pretty accurate indicator of market conditions”, he said.
Indeed, the team at Ian Reid Vendor Advocates have been involved in several recent auctions that have attracted large numbers of highly competitive bidders. As widely reported in the media last weekend, our auction in Batman Street, Fitzroy North attracted five bidders who pushed the price more than 20% above the reserve.
If you are considering selling this Spring, it’s worth remembering that the official start of the season is now just a matter of days away. You’ll find lots of general advice on how to avoid costly mistakes when selling your property, in our free booklet“Fatal Real Estate Traps Exposed”. But if you’d like to discuss your options on how best to sell your specific property, you can call our helpful Customer Service team on 1300 400 400.