More than 160 Melbourne retailers canceled auctions as buyers became cautious ahead of the next interest rate call.
Private sales are replacing the auction hammer in Melbourne as 164 sellers delist amid renewed rate hike sentiment.
PropTrack data shows Melbourne recorded an average of 68.6 per cent this week, with 653 reported results and 164 withdrawals.
The jump suggests that many retailers are opting for private sales campaigns rather than risking the public going under the hammer as uncertainty grows ahead of the upcoming interest rate call in four weeks’ time.
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Nick Johnstone director Nick Johnstone said the soft auction conditions came at the same time buyers were being offered real value in blue-chip pockets, with prestigious family homes in the world selling for below record.
“Properties that are $3m to $4m that might have been $4m to $5m a few years ago have adjusted 10 to 15 per cent,” Mr Johnstone said on Monday.
“That’s the value that matters. If you can get a quality home in a great location in a blue-chip pocket, you’re buying the solid basics at a discount to get you up to scratch.”
Mr Johnstone said the auction force had fallen, as private sales continued to move.
Nick Johnstone says Melbourne’s prestigious homes are trading 10 to 15 per cent below peak value, making buying windows for green chips rare. Photo: Jake Nowakowski
“There was definitely a buzz in the air,” he said.
“We had a strong week for private sales, but the auction market lost momentum.
“Consumers are taking notice.”
He said Melbourne had been flat for almost two years and history shows that long delays can be followed by sharp rebounds when confidence returns.
“I remember the time of the GFC in 2008, we had six months of peace, then 2009 went crazy,” Mr Johnstone said.
“We are the only country where prices have not increased significantly.
“That’s why interstate buyers are moving around, seeing limited value here.”
Damian Medici says rate hike talks are changing sentiment, but skepticism can fuel consumer decision-making.
Auction power has been subdued across Melbourne, with several buyers competing to go under the hammer this month.
The director of Margin Finance, Damian Medici, said that the number of withdrawals was a sign that they are reading the room and managing the campaigns properly.
“Whenever there is talk of a rate hike, sentiment changes, people stop,” said Mr Medici.
“As for protecting the seller, no agent wants to put a property up for auction if they know it won’t sell under the hammer.”
But Mr Medici said that the relaxation could create momentum for owner-occupiers ready to take action while competition eases.
“The irony is that that’s usually where the best opportunities come from,” he said.
Ray White Bayside Group director Kevin Chokshi warns buyers who are waiting risk missing out as many homes still sell within 10 days.
Ray White Bayside agent Kevin Chokshi said the auction numbers did not meet the full level of demand, with many homes still expected to go live shortly after Saturday.
“Most of the properties that are passing through today will still be sold within 10 days,” said Mr Chokshi.
His advice to shoppers across Melbourne considering waiting for the Reserve Bank’s decision in March was blunt.
“Doubt is like heartache.”
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