Melbourne auction market’s weird response to inflation data

Melbourne auction hammers mostly fell on the side of sellers, despite growing expectations of an interest rate hold on Tuesday reducing registered bidders.

A looming public holiday for the Melbourne Cup and grim inflation figures experts believe have ruled out an interest-rate cut on Tuesday did little to hurt home sales yesterday.

But they might have scared off a few buyers.

PropTrack data shows 65.4 per cent of 408 auction results reported yesterday ended in a sale, in a preliminary clearance rate that suggests buyer demand hasn’t shifted from where it has been throughout spring.

But separate data from Victoria’s biggest real estate firm, Ray White, shows the number of registered bidders fell from 3.4 per cent to 2.7 per cent in the past week.

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Sales performance executive Jake McIntyre said with their internal clearance rate above 70 per cent, slightly above the trend for the year so far, the buyers who did proceed this week were “probably the most serious”.

Mr McIntyre said both the inflation data released last week showing a rise in the consumer price index which most experts have said means the Reserve Bank is now unlikely to cut rates on Tuesday, as well as the long weekend could have clipped registered bidder numbers.

29 Audley St, Coburg, was among the top results for Ray White yesterday, sold under the hammer for $1.025m — with six bidders in attendance.

PropTrack senior economist Eleanor Creagh said home prices in Melbourne were likely to continue climbing across the rest of the year, even if the Reserve Bank did not cut interest rates further.

This suggests sellers will remain in control even if buyers don’t get another budget boost before Christmas.

However, Real Estate Institute of Victoria acting chief executive Jacob Caine said he had heard from agents across the city that many sellers had sought to get sales locked in ahead of auction, rather than risk passing in over the weekend and losing momentum if the Reserve Bank holds mortgage costs steady on Tuesday.

24 Chapman Blvd, Glen Waverley, was Melbourne’s highest priced auction sale reported to PropTrack, with a $3.701m result.

“But given the context of a virtual long weekend and the commentary around monetary policy, I would consider a mid-high 60s clearance rate result to be a success,” Mr Caine said.

While the number of auctions testing the market was down this week, PropTrack forecasts show it is expected to spike back up to more than 1500 auctions for each of the next two weekends.

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