Melbourne's preliminary auction clearance rate fell to 57 per cent last week, just below the previous week's 59 per cent, as the spring season entered its final month before the Christmas break. A four-bedroom Montmorency home sold for $235,000 above its reserve, while a Richmond townhouse failed to attract a single bid.
The preliminary clearance rate was based on 515 reported results from 773 scheduled auctions, with 89 withdrawn. Withdrawn auctions are counted as unsold when calculating the clearance rate. Almost 150 more auctions were scheduled this week as the spring market ramps up.
A four-bedroom home at 30 McCarthy Grove in Montmorency sold for $1,475,000, well above the $1.24 million reserve. Ray White Eltham agent and auctioneer Jackson Ball said the property attracted three bidders and that the reserve had been advertised earlier than the required seven days before auction, giving the vendors two weeks to gauge market reception. He attributed the competition to the home's “emotional pull” from its proximity to bushland and the local primary school. The winning bidders are a couple with two children attending Montmorency South Primary School, and the vendors are retiring to a country block in Bundalong.
In Richmond, a townhouse at 13/16 Goodwood Street was passed in without a single bid after being listed with a reserve of $900,000. Barry Plant Croydon agent and auctioneer David Stewart said the campaign lost two potential buyers in the final weeks. "We had a couple of false starts with buyers that, for whatever reason, didn't proceed," he said. The vendors will delay retirement and convert the property to a rental.
A four-bedroom home at 3 Toirram Road in Mount Waverley sold for $1,525,000, or $125,000 above reserve, after a 40-minute auction with seven bidders. Ray White Mount Waverley agent Jacob Biviano said the corner-block location led to a “good auction” and that the home was suitable for a few different buyer profiles. Local upsizers, renovators and developers helped drive competition.
Noel Whittaker advised in his Ask an expert column that the six-year rule can allow a former home to remain treated as a main residence after it is rented out and, provided no other property is treated as a main residence for tax purposes during those two years, the owner should be able to sell it without capital gains tax.
Analysis
Why This Matters
- Melbourne's clearance rate is a bellwether for housing market sentiment; a dip suggests buyers remain cautious despite spring activity.
- The six-year capital gains tax rule can significantly affect a vendor's net proceeds and timing decisions, particularly for those downsizing or retiring.
- The spring season often sets the direction for the next year's market, making recent trends important for buyers and sellers.
Background
Spring auction season in Melbourne has been unusually quiet this year, but volumes are now increasing as the year-end approaches. Last week's preliminary clearance rate of 57 per cent sits just below the previous week's 59 per cent, and the number of scheduled auctions rose by nearly 150 compared to the prior week.
What to Watch
- Whether next week's final results sustain the clearance rate or see further softening.
- The impact of interest rates and economic conditions on buyer demand through the remaining spring weeks.
- Vendors may accelerate sales before the Christmas and January break to avoid further market uncertainty.
Checked
12 claims in this story checked against 1 source: 11 supported.
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- SupportedMelbourne’s preliminary clearance rate dipped to 57 per cent as the spring market gained pace.Brisbane Times - Latest News: “There were almost 150 more auctions scheduled this week as the unusually quiet spring auction season ramps up in its final month before the Christmas and January break.”
- SupportedThe 57 per cent rate was just below the previous week’s 59 per cent.Brisbane Times - Latest News: “The preliminary clearance rate sits just below the 59 per cent from the previous week.”
- SupportedThe preliminary rate was based on 515 reported results from 773 scheduled auctions, with 89 withdrawals counted as unsold.Brisbane Times - Latest News: “Domain recorded a preliminary auction clearance rate of 57 per cent from 515 reported results throughout the week, while 89 auctions were withdrawn. Withdrawn auctions are counted as unsold properties when calculating the clearance rate.”
- SupportedAlmost 150 more auctions were scheduled for this week.Brisbane Times - Latest News: “There were almost 150 more auctions scheduled this week as the unusually quiet spring auction season ramps up”
- SupportedThe Montmorency home sold for $1,475,000, which was $235,000 above its $1.24 million reserve.Brisbane Times - Latest News: “A four-bedroom home in Montmorency, in Melbourne’s north-east, on a stepped triangular block sold for $1,475,000 at auction on Saturday, with three bidders pushing it $235,000 above its reserve.”
- SupportedJackson Ball attributed the Montmorency home’s competitiveness to its “emotional pull” and proximity to bushland and the primary school.Brisbane Times - Latest News: “Ball said the property was competitive because of its “emotional pull”, given its proximity to both bushland and the primary school.”
- SupportedThe Richmond townhouse was passed in without a single bid.Brisbane Times - Latest News: “In Richmond, a townhouse at the rear of a quiet block which is just over 10 minutes’ walk from Yarra Park and the MCG, and nearby Bridge Road, failed to sell at auction when it was passed in without a single bid.”
- SupportedDavid Stewart said, “We had a couple of false starts with buyers that, for whatever reason, didn't proceed,” and his team lost two potential buyers in the final two weeks.Brisbane Times - Latest News: ““We had a couple of false starts with buyers that, for whatever reason, didn’t proceed,” he said. His team lost two potential buyers – an investor acting through a buyer’s agent and a first home buyer – in the final two weeks of the campaign.”
- SupportedThe Richmond vendors will delay retirement and convert the property to a rental.Brisbane Times - Latest News: “The vendors will now delay retirement and convert the property to a rental for at least the next year, holding off selling for a more favourable market.”
- SupportedThe Mount Waverley home sold for $1,525,000, $125,000 above reserve, after a 40-minute auction with seven bidders.Brisbane Times - Latest News: “A four-bedroom cream brick house in Mount Waverley, in the city’s south-east, sold for $1,525,000 after seven bidders pushed it $125,000 above its reserve during a mammoth 40-minute auction.”
- Partly supportedThe tax rule may aid vendors.Brisbane Times - Latest News: “If you’re planning to offload a house you’ve been renting out, you might be able to avoid paying CGT.”
- SupportedUnder the six-year rule, an owner who does not treat another property as their main residence for tax purposes during the two rental years should be able to sell the former home without capital gains tax.Brisbane Times - Latest News: “The good news is that the six-year capital gains tax rule allows you to continue treating a former home as your main residence for up to six years after moving out, even if you rent it to tenants. This means that, provided you do not treat another property as your main residence for tax purposes during those two years, you should be able to sell the property without paying capital gains tax.”