Powered by MOMENTUM MEDIA
subscribe to our newsletter

Auction drop-off less drastic in Melbourne lockdown 2.0

The “negative shock” to home auctions in Melbourne has been less drastic in the second round of lockdown, new figures from CoreLogic show.

According to property analytics company CoreLogic, the second round of lockdown in Melbourne (which came into effect at midnight on 8 July) has resulted in a higher withdrawal rate in the past few weeks, but the prospects aren’t as gloomy as they when the coronavirus first forced lockdown in the city in March.

The six-week lockdown imposed in metropolitan Melbourne and the Mitchell Shire to curtail the resurgence of the coronavirus in Victoria has so far resulted in reduced clearance rates. For the week ending 12 July (the first week of lockdown in Melbourne), the city reported a clearance rate 51.2 per cent, dropping to 43.7 per cent in the second week (ending 19 July).

However, CoreLogic notes that the first round of lockdown saw withdrawal rates peak at a much higher level (64.7 per cent) across Melbourne – largely due to a ban on physical attendances at auctions. This also led to a spike in the number of properties sold before auction.

This time around, the withdrawal rate has reached 42 per cent, and more properties are now being sold via online auctions.

Advertisement
Advertisement

In the week ending 29 March, for example, CoreLogic notes that the portion of properties sold at virtual auction was just 9.2 per cent. For the week ending 12 July, however, the portion was 23.4 per cent – and hovered around the 20 per cent mark in the second week of lockdown 2.0.

“Given COVID-19 saw an adoption of online sales methods earlier in the year, real estate agents and auctioneers should be more prepared to pivot towards a ‘virtual’ auction environment and virtual auctions may be more successful this time around,” the analysts suggested.

Moreover, a greater proportion of homes are being sold prior to auction in this new lockdown period. 

More than 20 per cent of properties were sold prior to auction over the first two weeks of Melbourne’s lockdown, reflecting a similar trend first observed in late March.

“Furthermore, despite high levels of uncertainty, it is also interesting to see how quickly the auction market has rebounded as auction resumed across Victoria. 

PROMOTED CONTENT


“If the last phase of lockdowns was anything to go by, the auction market and, more broadly, housing market activity, is likely to recover as restrictions are eased or lifted,” the analysts noted.

There are 558 Melbourne homes scheduled for auction this week, an expected rise of 11.6 per cent on last week’s volumes (500), which saw a large number withdrawn (209).

[Related: Melbourne lockdown to drag clearance rates]

Auction drop-off less drastic in Melbourne lockdown 2.0
Auction drop-off less drastic in Melbourne lockdown 2.0
mortgagebusiness

Grow your business exponentially in 2022!

Discover the right strategies to build a more structured, efficient and profitable businesses at The Adviser’s 2022 Business Accelerator Program.

Visit the website here to secure your ticket.

Annie Kane

Annie Kane is the editor of The Adviser and Mortgage Business.

As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts. 

Contact Annie at: This email address is being protected from spambots. You need JavaScript enabled to view it.

Latest News

The percentage of young adults looking to pay down their home loans has risen over the past five months, according to new data. ...

Despite the Reserve Bank digging its heels in on the timing of its cash rate climb, Westpac economists have predicted the right conditions w...

Customer-owned banks operate around four branches per $1 billion in assets, while the big four collectively run less than one shopfront per ...

Join Australia's most informed brokers

Do you know which lenders are providing brokers and their customers with the best service?

Use this monthly data to make informed decisions about which lenders to use. Simply contribute to the survey and we'll send you the results directly to your inbox - completely free!

When do you expect the cash rate to start increasing?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.