Melbourne’s clearance rate has sunk below 51 per cent, its lowest level since Daniel Andrews’ lockdown era.
Melbourne’s clearance rate has slipped to its lowest level since the city’s last Daniel Andrews ordered lockdown, with less than 51 per cent of sellers locking in a buyer last weekend.
It comes as separate figures have revealed three of the city’s most prominent auction regions are now also the most likely places for homeowners to offload a property at a loss, which leaves the 426 Victorian properties going to auction this weekend facing challenging conditions.
Revised auction results data from last week that was collated across this week has revealed Melbourne achieved a just 50.8 per cent success rate as May drew to a close.
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PropTrack stats show this is the city’s weakest result, outside of the December-January annual market shutdowns, since September, 2021 — when Melbourne was still in the midst of its last lockdown.
Economist Anne Flaherty said while Victoria is typically more robust for clearance rates than other states, it was now getting very close to the point where most sellers going to auction would not get a result.
“So it’s pretty weak for Melbourne’s usual standards,” Ms Flaherty said.
“That’s the lowest result since September 2021. Though we have had a few come close, with a 52 per cent and a 51.3 per cent.”
Realestate.com.au economist Anne Flaherty says sales under the hammer are pretty weak by Melbourne’s usual standards.
Compounding the state’s auction pain are separate PropTrack statistics showing that a quarter of Inner Melbourne homes are being sold at a loss compared to their last purchase, the worst level in the country outside of outback Queensland.
The Statistical Area Level 4 region of Inner Melbourne covers the city from Elwood in the south east to Coburg in the north and Kensington in the west, and had a median loss of $86,500.
Ms Flaherty said this figure was likely exacerbated by high numbers of apartments built as investor-grade properties in the past decade being sold now for less than owners had paid.
But Melbourne’s Inner East was the nation’s next worst spot for sellers, with 18.2 per cent taking a loss. That region covers the city’s auction heartland and extends from Kew to Doncaster East, and from Ashburton to Templestowe.
The last time Melbourne’s clearance rate was at the level recorded last week, Daniel Andrews had the state in lockdown during the Covid pandemic. Picture: Asanka Ratnayake/Getty.
The Inner South was next worst at 13.3 per cent, and covers mostly bayside suburbs from Brighton to Patterson Lakes.
The two regions’ median losses range from $231,000 to $243,000.
Ms Flaherty said while newer apartment buildings could be found in both areas, these were also Melbourne’s two most expensive SA4 regions and faced some of the most volatile responses to changes in interest rates as they could have more dramatic impacts on the cost of paying loans.
The economist said while an auction could help get the best result when the market was performing well, in current conditions it might lead to buyers having better negotiating positions once they saw no others were interested.
Ms Flaherty added that paired with high interest rates that might be forcing some sellers to do what it takes to get a deal, it was possible they would be locking in a loss.
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