Melbourne’s auction market is facing a test of seller expectations, with REA Group figures showing almost as many Victorian homes sold before auction as under the hammer.
Melbourne sellers chasing unrealistic prices are contributing to the city’s auction struggles, a leading auctioneer has warned.
REA Group figures showed Victoria recorded a preliminary 62.8 per cent clearance rate on Saturday, with 236 sales from 376 reported results. Of those, 120 sold under the hammer, 113 before auction and three afterwards, while 106 auctions were withdrawn.
The results came as 774 Melbourne auctions were scheduled for the week, 56 per cent fewer than a year earlier.
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Ray White Victoria and Tasmania chief auctioneer Luke Banitsiotis said sellers were still expecting more than buyers were prepared to pay.
“I think the elephant in the room is just that vendors are trying to still overshoot the market,” Mr Banitsiotis said.
Under Victoria’s new laws, sellers must disclose their reserve at least seven days before auction.
Mr Banitsiotis said owners who set that figure in line with buyer feedback were drawing four or five bidders, with published reserves acting like a “magnet”.
Agents also needed to prepare sellers earlier rather than relying on last-minute auction negotiations to secure a deal.
“You have to have the owner ready for auction day,” he said.
Ray White Victoria and Tasmania chief auctioneer Luke Banitsiotis said some sellers were expecting more than buyers would pay, while realistic reserves were attracting up to five bidders.
Figures he supplied showed the share of auctions switching to private sales had eased from 11.8 per cent to 10.5 per cent since the changes, although same-day clearance had fallen from 54.7 per cent to 40.7 per cent across the periods measured.
Melbourne buyer’s advocate Cate Bakos said she had experienced her first October Saturday without an auction appointment.
October was normally her busiest month, with work regularly disrupting family celebrations, including her daughter’s birthday.
“I’ve never, ever had a Saturday in October off ever,” Ms Bakos said.
Buyer’s advocate Cate Bakos said well-located homes needing renovation were facing less competition than renovated family properties, creating opportunities for purchasers.
She said agents were cancelling struggling campaigns before auction day, while some homes attracting no bids were subsequently drawing competing private offers.
Unlike at an auction, buyers could not watch their rivals bid and instead had to trust an agent’s account of competing offers.
“And that’s not transparent,” she said.
Ms Bakos said renovated family homes were still attracting competition, but well-located properties needing work presented opportunities for buyers.
Cate Bakos Property’s Christopher Sybenga documented Melbourne’s changing auction market, with agents reporting renewed interest in homes that struggled to sell earlier in spring.
Cate Bakos Property’s Christopher Sybenga captured a different picture in an Instagram video documenting Saturday’s auctions.
At Essendon, he recorded an auctioneer describing renewed interest in properties that had struggled to sell in August and September.
Another agent told Mr Sybenga he and a colleague had sold two properties at auction that day.
Nelson Alexander auctioneer Ryan Currie saw competition first-hand at 38 Alfred St, North Melbourne, where three families pushed a four-bedroom home to $1.506m, $256,000 above its published reserve.
Bidding opened at $1.14m before Mr Currie placed a $1.2m vendor bid. He declared the property on the market at $1.26m, with the contest eventually narrowing to two buyers.
A three-bedroom home at 77 Pleasant Rd, Hawthorn East, sold for $2.98m, beating its published $2.85m reserve by $130,000.
The five-bedroom house at 27 Halpin St, Brunswick West, sold for $2.75m, matching its published reserve after initially being advertised with a $2.5m-$2.65m price guide.
Mr Currie said the 332sq m block and rare side driveway attracted families despite the home’s renovation needs.
The successful buyers, who already lived locally, planned to downsize from a warehouse conversion within the next few years.
At 26 Marsh St, Maidstone, another family paid $960,000 for a home with a published reserve of $910,000.
The four-bedroom Victorian at 19 Bayview Ave, Hawthorn East, sold for $2.715m, $10,000 below its published $2.725m reserve.
The five-bedroom home at 9 Lofty Ave, Camberwell, fetched $2.695m at auction, exceeding its published $2.55m reserve by $145,000.
The sellers had arrived from Lebanon in 1982 and raised four children at the property, with two attending the auction.
Mr Currie said the underbidder had intended to demolish the house, but the successful buyers planned to keep it.
When the buyers told the sellers their family home would be retained, both husband and wife burst into tears.
The four-bedroom Victorian at 4 Parry St, Moonee Ponds, sold for $2.45m, matching its published reserve but $80,000 below its November 2023 sale price.
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