Rebalance in market aids buyers

Home buyers have taken a big increase in Melbourne property listings in their stride although some sellers are under pressure to lower asking prices.

A record 1261 homes went under the hammer on Saturday and sellers were keen to make transactions.

The Fairfax-owned Australian Property Monitors reported a clearance rate of 72 per cent from 944 auctions.

The Real Estate Institute of Victoria, which unlike APM includes Geelong auctions in its figures, posted a 70 per cent clearance rate from 1023 auctions.

It said 332 properties were passed in, 170 of them on a vendor bid.

But some property commentators are warning that the market has ”peaked” and is now down-shifting, which could put pressure on buyers who have bought a property in recent weeks and listed their existing home for auction in May.

A rebalancing in favour of buyers is becoming evident in the most heavily supplied segments of the market.

Family homes between $650,000 and $900,000 in the middle-ring suburbs 10 kilometres to 20 kilometres from the city are attracting fewer bidders at auction.

The chances of a buyer paying a ”full price” for a property at this price point are less than they were six months ago.

The same trends are occurring in the well-supplied market for $1 million to $1.5 million houses in the inner suburbs.

Estate agent Andrew Macmillan, of Jellis Craig Bennison Mackinnon, said more properties were for sale at this price point compared with the $2 million-plus segment. Buyers increasingly were fighting over $2 million-plus homes in prime spots because they were scarce.

Adviser Mal James, of James Buyer Advocates, also said houses priced in the ”early $1 millions” were attracting less competition than those priced at $2 million.

He said the market traditionally performed strongly in February, March and April, but sales tended to decline in May.

”In May 2010, the market started to ease and it was weak in 2011 and 2012. In 2009 and in 2007, the market in May was quite strong,” Mr James said.

Figures from RP Data show 10,561 auctions were held in Melbourne between January and mid-April. In 2012, just 5976 auctions were held in the same period, and 6696 were held in the period in 2013.

APM senior economist Andrew Wilson said affordability issues were weighing on the market as was speculation about interest rate rises.

”A very significant growth in listings can be a sign that the market has peaked – I think the peak was in the December quarter,” he said.

”We have certainly tracked a lower average clearance rate over the past four weeks than in the previous four weeks.”

The Melbourne market’s recovery began in September 2012, but it has not been evenly paced. House price growth and clearance rates have been flat during two-month periods in the past 18 months; at other times they have moved sharply up.

Dr Wilson believed the prestige market and the outer-east market had done much of the ”heavy lifting” in the recovery.

Other areas, such as the south-east and the west of the city, had performed poorly, he said.

”I think the market is shifting down a gear,” he said.

”There were a lot of incentives for sellers to get a sale today. That might keep the auction clearance rate on track, but the underlying supply-and-demand balance is starting to move back in favour of buyers.”

Still, the inner suburbs performed strongly on Saturday. Jellis Craig reported an 81 per cent clearance rate from 70 auctions, with sales most strong in the Boroondara council precinct.