Melbourne Property Market Sees Confidence Boost with Strong Clearance Rates

According to a recent article by Scott Carbines, the Melbourne property market has seen a boost in confidence in recent weeks, with strong clearance rates and a shortage of housing stock favoring sellers. PropTrack recorded a clearance rate of 68% from 539 reported results last week, with other real estate groups, such as Ray White and Barry Plant, also noting clearances of about 80% recently.

One of the reasons for this boost in confidence is the pause in the Reserve Bank of Australia’s (RBA) raising of the cash rate, which has given buyers more confidence in the market. As industry players note, buyers have also adjusted their budgets to the new interest rate environment.

Barry Plant chief executive Mike McCarthy said that the level of demand may have moved down, but buyers are still active. He noted that people who were looking at $1.5m might now be looking at $1.2m, people at $1.2m now looking at $1.1m, et cetera. His group had several strong sales across the weekend, including two state government-owned properties, both of which saw four bidders competing for them.

Ray White Victoria chief auctioneer Jeremy Tyrrell added that he believes the market has “turned a corner” since Easter. He said that the pause in the rate hike has inspired confidence, and the shortage of stock and migration are working in sellers’ favor.

However, while the market seems to be stabilizing, there are still concerns about inflation and its impact on the housing market. As Jason Murphy notes in a recent article, “Keeping low inflation matters, but the RBA is very interested in something else: inflation expectations. It wants people to expect low and stable inflation.” The RBA is hoping to prevent out-of-control inflation and a wage-price spiral that could lead to a big recession.

Overall, while the Melbourne property market seems to be seeing a boost in confidence, there are still concerns about inflation and the potential impact on the market. As buyers and sellers navigate this uncertain environment, it is important to remain vigilant and informed about market trends and economic indicators.

References:

Murphy, J. (2022, May 2). Are Interest Rate Hikes Over? Check Your Expectations. The Guardian. Retrieved from https://www.theguardian.com/business/2022/may/02/are-interest-rate-hikes-over-check-your-expectations

Carbines, S. (2022, May 2). Melbourne auctions: Confidence building in property market. Realestate.com.au News. Retrieved from https://www.realestate.com.au/news/melbourne-auctions-confidence-building-in-property-market/