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Anthony Albanese’s budget changes have reduced the number of bidders in Melbourne, but auctioneer Luke Banitsiotis sees signs two bidders are providing a “strong rhythm”.
A typical auction in Melbourne has one fewer bidders than a year ago, and some of the bidders are at their lowest ever at auction.
The city recorded a preliminary clearance rate of 61.8 percent in the second week of the spring selling season, a slight shift from the same point a week ago, although the projected number rose slightly to over 700 after starting the spring with just 630.
Ray White’s analysis of the auctions, of which there were hundreds last month, found that an average of two people bid for every home that goes under the hammer.
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A year ago there were more than three.
But even in 2024, when interest rates were at current levels, there were about 2.4 typical bidders per auction.
The dramatic low point this year has been reached, although auction numbers have fallen to their lowest level since the pandemic. Just over 700 auctions are scheduled this week – weak compared to recent spring standards and well below the nearly 1,200 a year ago.
Ray chief economist Nerida Conisbee said the decline was heavily influenced by investors backing down following federal budget changes to investor tax benefits related to capital gains and negative gearing in May this year.
Ray White chief economist Nerida Conisbee believes declining bidding is due to weakening investor appetite following the passage of the federal budget in May.
She added that this was also due to low attendance during open inspections.
“The whole market seems to be a bit stuck at the moment and that is impacting buyers and sellers,” Ms Conisbee said.
Still, some Melbourne suburbs are defying poor market conditions, with separate statistics from Ray White showing their auctions in Bundoora, Mill Park, South Morang and Glen Waverley recorded an average of three or more bidders over the past four weeks.
But the number of sellers benefiting from the method has fallen in these areas, with results reflecting just six auctions in Bundoora, where there were an average of 3.8 bidders at each auction.
“Mill Park and Bundoora is a bit surprising… but I think it reflects the lack of stock,” Ms Conisbee said.
The economist added that this could also be a sign that sellers in these suburbs were being more realistic with their asking prices ahead of auctions.
38 Brewster St, Essendon, was this week’s most expensive auction result, selling for $4.3 million.
Toby Balazs, chief executive of the Real Estate Institute of Victoria, said the numbers were likely linked to Melbourne’s low clearance rate and it was important to note that the areas that were seeing success were also seeing reduced auction activity.
“That will probably be because there are fewer auctions,” Balazs said.
“The health of the auction market is currently in question, but after October 1st it will become even more difficult as we await clarity on the new auction rules.”
He added that while a revision was likely to occur in the coming days, a preliminary approval rate of more than 60 percent could be an early signal of a market rebound in the spring – but the coming weeks would clarify the situation.
Ray White Victoria head auctioneer Luke Banitsiotis said there had been a “strong rhythm” over the last seven days, with auctions around Melbourne averaging 2.7 registered bidders and two active bidders.
23 Kilcunda Drive, Rowville, tested upcoming auction law changes and sold at auction for $11,000 above expectations.
“Successful sellers have taken the time to engage with the real-time values presented by the space and have decided to meet the market where it is,” Mr. Banitsiotis said.
“By making informed decisions based on current feedback, these homeowners have achieved their core goal of selling and successfully embarked on their next chapter.”
He added that if sellers got their prices right, buyers would be out there and “ready to compete.”
However, there has been a positive sign with an upcoming change to Victoria’s auction law that will force home sellers to disclose their reserve price seven days before the sale date.
A house at 23 Kilcunda Drive, Rowville, which trialled the requirement a few weeks before it became enforceable, sold for $1.336 million after the reserve price was posted at $1.325 million.
Jack Rickard of Ray White Ferntree Gully handled the sales while Fabian Sanelli called the auction.
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