With an 82% clearance rate achieved on the weekend you would think the market is running hot, but once you look a little deeper is there cause for concern.

With less than 500 auctions conducted on a weekend without the distraction of school holidays or a major event you would think the Melbourne auction market has packed its bags and gone to Europe.

What does this all means though, surely it can’t be doom and gloom or is it actually sunshine and rainbows.

• Clearance Rate vs. Market Strength: A high clearance rate, like the recent 82% in Melbourne, typically indicates a strong market. However, other factors are at play, contributing to the market’s current state.
• Supply and Demand Imbalance: Despite the high clearance rate, Melbourne’s market is experiencing an imbalance between supply and demand. The low number of auctions and listings suggests a lack of supply, which can contribute to a slower market.
• Buyer Caution: Buyers are exercising caution due to economic uncertainty, interest rate fluctuations, and affordability concerns, leading to a more subdued market.
• Sellers’ Expectations: Sellers may have unrealistic price expectations, leading to a gap between their desired prices and what buyers are willing to pay.
• Market Fragmentation: Melbourne’s market is fragmented, with varying performance across different suburbs, price segments, and property types.
• Economic Factors: External economic factors, such as interest rates, inflation, and global economic trends, can impact the property market, even with a high clearance rate.

The Melbourne property market is complex, and a single metric like clearance rate only tells part of the story.

You must look deeper as to why we are seeing a drop off in the available property but also why are we seeing so many auctions cancelled.

Yes, some have sold early due to a strong offer, but it can’t always be that simple can it.

• Cancelled Auctions: Melbourne has seen a significant number of cancelled auctions in recent weeks, with some sources indicating that up to 50% of scheduled auctions have been withdrawn or cancelled.
• Market Sentiment: The high number of cancelled auctions and low auction numbers may indicate a shift in market sentiment, with sellers becoming more cautious and buyers gaining negotiating power.
• Buyer’s Market: Some experts suggest that Melbourne is transitioning into a buyer’s market, with reduced competition and increased opportunities for buyers to secure properties at lower prices.
• Seller Caution: Sellers are becoming more cautious, with some choosing to withdraw their properties from auction due to uncertain market conditions and reduced buyer demand.
• Market Correction: The cancelled auctions and low auction numbers may be indicative of a market correction, with prices adjusting to more sustainable levels after a period of rapid growth.

When looking to buy a property it is always key to remember that it is a long term asset and the market doesn’t always perform positively.

Being able to hold a property until you are ready to sell almost as important as buying the right property.