By Philip Webb
Melbourne has just experienced its biggest auction weekend since 2018, with buyers snapping up 84 per cent of the 3800 houses and apartments for sale over the weekend.
Heads are spinning as buyers continue to send prices soaring above the reserve. We predict that pressure will continue to build over the next few weeks, with these recent sales further reducing the amount of stock on the market. Coupled with record-low interest rates, this low volume of properties is creating the perfect storm for demand.
So, what impact is this having on buyers? As prices continue to rise, some buyers are putting away their wallets in hesitation, convinced that they will secure a better deal if they hold out. However, others are so desperate to secure a property that they are just jumping into the market now, even if that means compromising on price or product.
On the other hand, vendors are clearly excited by what they are seeing happen around them, and comparing properties that go way over reserve to their own. However, vendors should set realistic expectations and look at their campaign as whole, not just a snapshot of the market. Taking a look at the KPIs of a campaign is a good indication of how their property may perform at auction – how many groups went through? How many repeat inspections were requested? This will ensure that a realistic reserve price is set, and that the property is not passed in at auction.
From a real estate perspective, we wish to see supply and demand reach an equilibrium. Hopefully, as confidence returns to the market, this stability won’t be too far off!