Auctions dry up as economy falters Nicola Webber From: Herald Sun March 17, 2012 12:00AM 2 COMMENTS Increase Text Size Decrease Text Size Print Email Share
THE NUMBER OF HOMES BEING SOLD AT AUCTION HAS DIMINISHED SIGNIFICANTLY. HERALD SUN
MELBOURNE'S auction market has stalled, with the number of properties being sold under the hammer hitting a 10-year low.
The number of auctions being held across the city has plummeted to lows not seen since the global financial crisis, amid concerns about the state of the economy.
Data reveals the clearance rate so far this year is 62 per cent - up from the lows of late last year but well down on the 10-year average.
It compares with a clearance rate of more than 86 per cent in the first three months of 2010 and more than 84 per cent in 2007.
The Real Estate Institute of Victoria data also shows just 2977 auctions have been held so far this year, compared with 4167 in 2008. That figure fell to 2236 as the effects of the GFC hit in 2009.
RP Data figures, released yesterday, show 12,738 properties went on the market across Victoria last month, down almost 2000 on the same time last year.
It follows news that the state's property slump has punched a hole in state government coffers, with revenue collected from stamp duty down $360 million compared with 2010.
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REIV spokesman Robert Larocca said people were clearly still concerned about the economy.
"The fact is the property market does not move independently from the broader economy," he said.
"Sellers are still selling, buyers are still buying, but external factors, including weak consumer confidence and concerns about the state of the economy, are continuing to impact the market."
Last year the property market was dogged by falling prices and months of clearance rates in the mid-50s.
It has rallied this year, with clearance rates breaking 60 per cent three times already.
While Melbourne is known as the auction capital, statistics show owners opt to put their property under the hammer when the market is strong but choose private sales when prices are stable or falling.
But it is not just the auction market that has lost steam.
RP Data figures show the number of homes sold in Melbourne last year - by auction and private sales - was the lowest in 10 years.
Mr Larocca said current low volumes of auctions were a return to the years between 2004 and 2006.
"Auction numbers are well below peaks that we have previously seen and slightly below the 10-year average at this time," he said.
Mr Larocca said clearance rates so far this year showed demand was strong in Hawthorn, Surrey Hills, North Melbourne, Brunswick and Elsternwick.
"At the other end of the scale demand has been low in Pascoe Vale, Yarraville, Reservoir, Essendon and St Kilda," he said.
Statistics released this week showed 31 suburbs around the country had fallen off the $1 million list.
Two Victorian suburbs were in the top 10 with Deepdene, at a median price of $2.95 million, taking over from Toorak, at $2.4 million, as Australia's most expensive place to live.
