It’s a buyers’ market across the Middle Ring.
On the first two weekends of October more than 1,487 auctions were recorded by the Real Estate Institute of Victoria (REIV). 559 homes were sold at auction, with 613 homes passed in, 311 of those were on a vendor bid. The clearance rate so far in October has averaged 54%, sharply down on September’s 59%.
Supply of homes for sale is low which usually stokes the fire of competition among buyers. But buyer demand so far in October has been slow too, in fact housing turnover is almost at a 20 year low (ABS). This puts more downward pressure on home prices. Although demand is patchy at present, inner city values are still being bolstered by location and outer zone prices are holding up because of good affordability, but the middle ring is currently looking like the meat in the sandwich.
Middle-ring suburb home prices have dropped by 10% or 12% since the value peak in 2017 (Domain). When an ‘ugly duckling’ or otherwise hard to move property fails to sell, most owners drop the price, which just increases price-slide in those suburbs.
There are good buying opportunities at the moment. In a buyers’ market however people tend to keep their hands in their pockets at auction hoping to then negotiate a bargain on the passed-in property. If the home has some drawbacks and looks like it could go for a bargain – but of course it can attract extra buyer interest simply for that reason!
On the other hand if it’s a good quality home going to auction, a bargain is unlikely, because if it’s passed in, the would-be buyer will still be competing with the other ‘slow off the mark’ buyers. Not every vendor’s in a mad rush to sell – in fact such sellers are a rarity. The after-auction sale process then reverts to a bidding contest or what is more commonly known as an auction after an auction.
Principal Advisor &
Licensed Estate Agent
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