Melbourne’s auction market has rebounded from a horror long weekend result, but agents say missing investors and nervous buyers are forcing a new level of behind-the-scenes dealmaking.
Property investors have vanished from parts of Melbourne’s auction market, handing cautious buyers fresh leverage and exposing a hidden wave of seller pressure as agents fight harder to keep deals alive.
The power shift is forcing agents into a more aggressive behind-the-scenes auction hustle, with buyers demanding reassurance, vendors being pushed to face weaker conditions and fixable flaws now threatening to derail sales before the hammer falls.
PropTrack recorded a preliminary 55.1 per cent clearance rate from 503 Melbourne auctions on Saturday, rebounding from the city’s dismal 47.8 per cent result over the King’s Birthday long weekend.
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Apollo Auctions Victoria director and head auctioneer Andy Reid said investors had stopped competing in the market he was seeing, leaving owner-occupiers to dominate both sides of the transaction.
“To remove the psychological barrier we need to simply acknowledge that investors have stopped, making this almost purely an occupier market on both sides,” Mr Reid said.
“It could create a less merciless environment.
“It is potentially exciting.”
Mr Reid said buyers had not disappeared, with a main road-facing terrace in St Albans selling for $788,000 after being quoted at $640,000-$690,000.
Five owner-occupier bidders emerged for the property, with three actively competing.
“The market has got a strong level of owner-occupier attention,” Mr Reid said.
“They are there, but the lesson is that if we keep doing the same thing over and over then we will keep getting the same resistant outcomes.”
Ray White Bayside agent Paul Allica says agents are having to work harder to keep nervous buyers engaged as Melbourne’s auction market becomes more selective.
Ray White Bayside agent Paul Allica said the figures reflected a much stickier market, where more deals were being saved before or after auction rather than won in a public bidding war on the day.
“I am probably selling about 60 per cent of my stock either before auction or after auction, rather than under the hammer on the day,” Mr Allica said.
“So the clearance rate is still not bad, but it requires a lot more work.
“It requires more hustle, more follow-up and more buyer management.”
Mr Allica said buyer fear had become one of the biggest issues agents needed to manage.
56 Argyle Ave, Chelsea, sold under the hammer for $1.615m after a cheeky auction-floor pitch helped push the result $115,000 above reserve.
In one recent campaign, he said the eventual buyers had been close to ruling out the home because they disliked a spiral staircase.
He found a builder, arranged a quote and showed the buyers the issue could be fixed for about $12,000.
“They thought it could have been $30,000 or that it might not be possible at all,” Mr Allica said.
“That gave them the confidence to bid.
“That is what this market is like. The agents have to work a lot harder to get bidders there, keep them engaged and give them the confidence to actually put their hand up.”
Mr Allica said buyers had more room to test sellers, particularly with offers before auction.
“There is a lot of property on the market where buyers do not need to be as afraid of throwing in an offer, because it actually might get accepted,” he said.
“There are a lot of vendors who are more motivated than they are letting on.”
He said vendors considering waiting for spring should weigh the risk of listing into a busier season with more rival homes for sale.
“My concern is that in the spring selling season there could be a lot more stock on the market,” Mr Allica said.
“If that happens at the same time as interest rates potentially rise again, it could put more pressure on prices.”
37-39 Bournian Ave, Strathmore, recorded Melbourne’s biggest reported under-the-hammer auction sale of the weekend, changing hands for $5.3m.
28 Diamond St, Niddrie, was among Melbourne’s top reported auction sales, selling under the hammer for $2.97m.
Real Estate Institute of Australia president Jacob Caine said buyers who were ready to act had gained more room to negotiate as less confident purchasers stepped back.
“At the moment, buyers have a slight advantage over sellers in that the conditions creating uncertainty are weeding out those buyers who are not confident and willing to part ways with their money,” Mr Caine said.
He said homes priced in line with buyer expectations were still selling quickly, while ambitious vendors were more likely to face longer campaigns.
Real Estate Institute of Australia president Jacob Caine says finance-ready buyers have gained more room to negotiate as cautious purchasers step back.
6 Trinafour St, Moonee Ponds, sold for $2.6m as higher-end family homes continued to attract bidders despite softer market sentiment.
“You are seeing in various pockets throughout metropolitan Melbourne and regional Victoria that those marketplaces and properties that are priced competitively, particularly in relation to the quality and location of the property, are selling quite rapidly,” Mr Caine said.
“Whereas those properties that are priced less competitively, and without much consideration for the current conditions of the market, are taking longer to be sold.”
The biggest reported under-the-hammer sale was 37-39 Bournian Ave, Strathmore, which sold for $5.3m.
It was followed by 28 Diamond St, Niddrie, at $2.97m, and 6 Trinafour St, Moonee Ponds, at $2.6m.
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