Melbourne's First Signs?

1127 Auctions Held
67.98% Clearance Rate.

Not sure about other markets but while looking for a PPOR in the inner east Canterbury/Glen Iris/Camberwell/Surrey Hills, auctions were slow and only 1/8 properties I attended yesterday sold. When bidding I found that competition from locals had reduced while there was a few foreigners still bidding. Sorry if this is a stupid assumption but does anyone else think the market at least in VIC is going to at least flatten out.

 

Victoria's peak on the corelogic price index was exactly 2 months ago today (18 April) and prices are now down -2.1% on that peak. Last year the market was up around +2% over the same period. Year to date, prices are only up +3.8%, with all gains made in the first quarter of the year (over the last 3 months they are down -0.37%).

I'd say that's a pretty big sign that the market is off the boil. There is still a high number of sales attributed to investors, so i do think there is strong scope for prices to slow harder. that very much makes it a reality that prices will stall, and possibly fall a minor amount.

 

It might not have been bad to buy now.... FHB will come back from July.

 

@melbournian has experience with my area it seems. There's almost no FHB in my PPOR market since its ~2M, do you guys think it's a good time for me to purchase.

 

I read that historically Melbourne prices start to drop when clearance rates drop into the 60%-70% range. Prices are down a little recently so it is possible that we may have hit the peak.

FHBs will also likely have a positive effect on some markets starting next month - obviously not in the $2M price range though. Not all locations in Melbourne will reach their peak at the same time

IF we are at the peak and prices are starting to drop then it's not a good time to buy, you'd be better off waiting until prices bottom out and are about to risk again.

It's too early to be certain that we're at the peak, this could be a temporary plateau. Prices might increase further. We won't really know either way until well after any peak has been reached.

 

Well then u are in luck without competition in camberwell, Canterbury I was scoping mainly villas in those areas a couple of years ago. But I recall just 2-3 months ago Canterbury was recording the highest sales on auction week

It is def cooling off In upper end suburbs esp the likes of upper end Balwyn Doncaster glen waverey I recall seeing stuff sold 1.7 mil then similar stuff sold 1.4 mil and this has been happening always really in upper end mkts

The competition are like in the slums of Albert st Preston within the 600-700kish mark or like ppl fighting for 1000sqm in Thomas town or lining up in those Werribee or Pt coin sales offices for a block of land.

Like what @sash said what was a 2 in front of the property price in hoppers became a 3 and a 4. Same as in Pt cook what was a 3 become a 4 and then became a 5. I went to a few Auctions in the west and north still one place sold 30k more than 2 months ago 5-6 doors away 770k Before anyone says it was a better house ex housing comm and the one that sold less had a permit for a 4 Bedder in the back.

Even one of block apartment sold as well in Prahan for more than it's original price 2.3+ mil after being passed in a couple weeks back

 

Well rate rises have started hitting in recent months, and the banks have started their push from IO lending towards P&I and increasing rates and moving LVRs to 80% from 90% in earnest this month.

It will be no wonder that markets cool down Australia wide. Probably the start of a correction, lending to the residential construction sector has already been shrinking past half year.

Top end would probably get hit first as the smart money gets out and stays away....

 

Is sincerely hope there is a significant drop but not a crash so when the time comes and everything is doom and gloom . I can bargain hard and get a ppor for a great price. And not a price that to me at this point in time seems silly

 

I think watching this indicator or indicators like clearance rates, as others mentioned, isn't necessarily the best approach. It might be a good predictor we'll have to wait and see. What I'd watch instead is just the feel, the vibe, of market sentiment. It certainly seems to have taken a sharp turn into the negative. I'm finding most people I speak to are seriously doubting the market's got any legs left. Last year, people didn't think the market was on the brink. This year? The bears are starting to outnumber the bulls. I don't think that's a great sign. Bubbles are grown and burst by sentiment.

 

Absolutely, bubbles burst in a very uneven way, over a course of years. In Ireland lots of small towns collapsed well before Dublin. In USA even major cities burst at very different rates. You can see here for example there's a range of about 2 years between city peaks. case shiller 20 - Google Search:

And of course different areas within cities fell much more than others. In Dublin the biggest falls were concentrated in fringe estates, new development areas, by far.

 

The problem with vibe is that you cant forecast it. It you bought in january when the vibe was strong, you'd have made almost enough to cover your buyers tax by now and then its peak conditions so if you needed to sell, it would be at a loss. Statistical indicators allow you to predict when the vibe will change, based on reasons why it could.

To me, watching auction results and historical price trends are both consequence data, not cause. I would only ever base a decision to buy on causal data.

 

The Vibe is important.

Just one of the myriad things "The Castle" has taught us:

 

Going to as many auctions as you can and feeling the vibe is something I definetly agree with. It really gives an insight into consumer confidence from all sorts of buyers for your specific market.

 

Where is the 68% from?

Domain says 75%
Melbourne Real Estate Auction Results

 

My data is based of an email I got from realestate.com.au

 

Yes, but the link has updated the results I believe. Just looked in more detail:
RealEstate: Of 1041 results available, 71% cleared
Domain: Of 720 results avaialble, 75% cleared

 

On a side note, is there a source available where we can get "exact" clearance data for free ?
Newbie here, please excuse if silly question.

 

Auction Results & Saturday Auction Clearance Rates

figures are updated on thursdays, released as "preliminary" until then. that really just means its a low sample of actual results. This is about as good as you will get.

 

Thanks. I was looking for a source to download the historical data for analysis. Might be hard to scrape all the links as it is.

 

ah righto. yeah I'm not sure about historical, especially as like you say different sources give different results. I find the REA/CoreLogic stuff generally has the highest number of auctions included so I tend to stick with that.