House hunters in Melbourne have had a tough year. They’ve battled strong house price growth and a shrinking pool of available properties. Thankfully, their luck is about to shift, as an estimated 4,500 auctions are set to test clearance rates in the home stretch of the year.
Home buyers are set to enjoy a wider selection of homes and could negotiate pre-auction offers with cautious vendors who’re keen to avoid auction-day competition, agents say.
There are now an average of two bidders per auction compared with five bidders between June and August when stocks were less abundant, said Tristan Tomasino, director and senior auctioneer at Biggin & Scott Yarraville. Some buyers were looking at multiple auctions scheduled on the same day, compared with just one earlier this year.
Buyer demand remains strong, but housing supply has increased significantly in the inner west. Vendors are encouraged by huge profits, with many trying to seal deals before the end of 2016.
Tomasino emphasised that many of his vendors would seriously consider selling before auctions if they received acceptable offers, as opposed to taking a chance at the auctions.
Rob Vickers-Willis, director at Abercromby's Real Estate, believes buyers would have more leverage between now and Christmas because there are only five good selling weeks left. Plus, the recent Trump victory in the US could create uncertainty in the Aussie property market.
Dr. Andrew Wilson, chief economist for Domain Group, said clearance rates traditionally waned over the final weekends of the year because of higher stock levels. Auction levels are about 20% lower compared with the same period last year, he said.
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