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Reserve price goes up front in October!
Over October’s first three weekends the Real Estate Institute of Victoria (REIV) recorded more than 1,178 auctions. 742 properties sold, 497 at auction, with 332 passed in. 244 properties were sold before auction with 1 property selling after auction. 1499 have sold by private sale. The clearance rate so far in October has averaged 70%. (It was 84% this time last year).
October snapshot
We’re in a correction phase. For buyers, this means some of the most favourable price conditions in years. It brings falling clearance rates and significant vendor discounting. According to analysts like Cotality, Melbourne home values have broadly fallen 5.2% to 7.5% below the peak (March 2022), taking about $64,000 off the median value since then.
Auction reserve must be revealed
October 16 brought in Victoria’s new law requiring sellers to advertise their reserve price at least seven days before the auction. The immediate result is a collapse in auction numbers and falling clearance rates. Mostly because it’s new and kind of confusing. But also, because penalties for agents are severe – up to $50,000 for failure to comply! The new rule is likely to increase the shift from public auctions to private treaty sales.
What are the pro’s and cons of the new rule?
What Melbourne stands to lose is the buzz of the public auction. Melbourne enjoys a good one, with the crowd (often including neighbours) even giving a round of applause after a hard fought auction. In an open street auction every bid is visible. Everything’s on the table.
But now, vendors are more likely to be concerned about mispricing their home. On the other hand, buyers can be scared off by what looks like a too high reserve.
With the alternative – a private sale, buyers can no longer see their competition. So there’s less transparency for buyers. For sellers though, a private sale lets them quietly adjust their price expectations, without the public embarrassment of a property passing in.
But the new reserve disclosure rule serves as a guideline only and it goes out the window during live bidding, as vendors can still legally change their minds and sell above or below the advertised reserve. Which makes it all a bit confusing!
Melbourne’s lower Quartile still holding its value
During September and October Melbourne’s most affordable homes (25% of the whole) kept holding their value and in many areas even grew in value, separating them from the broader city downturn. It’s being aggressively propped up by buyer demand (Cotality). The premium end of the market continues to take most of the hit.
Get the competitive edge you need with Buyer Marketing
In a patchwork market like this, there are definite strategies to buy very well. One of the best is to work with Buyer Marketing. Firstly, we filter out b-grade stock and identify what we know will be better quality and better buying. We have early access to off-market listings. We protect you from overpaying. We have great experience with after-auction, passing-in negotiations.
We take the pressure off, while getting you the best possible buy!
Peter Fox
Principal Advisor &
Licensed Estate Agent
Buyer Marketing

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