This isn't a critical election for property – whatever else the politicians say. Population growth - which looks secure - is more important.
How is Melbourne’s auction market tracking this year?
With the year’s half-way mark recently reached, it’s a good moment to gauge the comparative performance of the 2012 Melbourne auction market.
The accompanying chart compares the auction clearance rate for the first 24 weeks of the auction season in 2010, 2011 and 2012 respectively. It also records – in the bubbles – the average number of auctions each week and overall clearance rate for these periods.
The most striking feature is the significantly lower auction clearance rates in the first half of 2012 and 2011 compared to the first half of 2010. We now know that early 2010 marked the post-GFC property market peak that was engineered by the Rudd government stimulus. As you can see, the clearance rate deteriorated over the first half of 2010 from around 87% at the start of the year to around 65-70% in the middle of 2010.
Since 2010, the number of auctions and clearance rates have fallen significantly. Today, the number of auctions per week is, on average, 25% down on the equivalent period in 2010 and the auction clearance rate is around 59%.
Perhaps the most significant feature of the 2012 Melbourne market to date is the level of consistently. Unlike 2010 and 2011 – when the clearance rate fell over the course of the first half of the year - the clearance rate has remained relatively stable so far over 2012. This is indicative of a very transparent, balanced market, where buyers and sellers are fairly well matched – which is exactly what we’re seeing on the ground at the auctions we attend.
Whilst the auction clearance data does not herald an imminent revival of the market, it does demonstrate that the market is healthier and more resilient than the sickly caricature painted by much-quoted doomsayers.