Melbourne upsizer buys Essendon home $45,000 under reserve as auction pace cools

Preliminary clearance rate holds at 58 per cent as agents report buyer hesitancy after September rate rise

By LineZotpaper
Published
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A four-bedroom Art Deco home in Essendon sold for $2.655 million on Saturday, about $45,000 below its $2.7 million reserve, after passing in on a bid of $2.55 million and being negotiated in post-auction talks. The sale came at the last weekend before new Victorian laws require vendors to publish auction reserves, and as agents report growing buyer hesitancy following the September interest rate rise.

Two bidders were not enough for the fully renovated and extended home at 51 Woolley Street, part of the exclusive Mar Lodge estate which carries a single-dwelling-only covenant. Bidding opened on a vendor bid of $2.4 million, with a local professional wanting to upgrade trading offers against a young family before the property passed in at $2.55 million. The successful buyer negotiated the sale for $2,655,000.

Jellis Craig Moonee Valley's John Morello said the market was offering good opportunities for those looking to upgrade.

The Essendon home was one of 710 scheduled to go to auction across Melbourne last week. By Saturday evening, Domain recorded a preliminary auction clearance rate of 58 per cent from 508 reported results, with 78 auctions withdrawn. Withdrawn auctions are counted as unsold properties when calculating the clearance rate.

Agents, many of whom have already adopted the rule changes, say buyer hesitancy is growing after the September interest rate rise. Higher interest rates mean buyers can borrow less, and many are now looking for a bargain to meet reduced budgets.

The weekend also marked the last where reserves would not appear in advertising for properties listed for auction. New state laws mean vendors will be required to make their reserves public at least seven days before the auction is scheduled, with the rule taking effect on Friday.

Elsewhere in the market, a Fitzroy home passed in despite having two bidders and sold after the auction for $2.4 million, a three-bedroom Victorian in Carlton North sold under the hammer for $1,822,000, and first-home buyers secured a two-bedroom Footscray home after making just one bid.

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Analysis

Why This Matters

  • Melbourne's auction clearance rate, at a preliminary 58 per cent, is a widely watched gauge of housing market health for buyers and sellers.
  • New state laws requiring reserves to be published at least seven days before auction take effect on Friday, changing how vendors and agents handle auctions.
  • Higher borrowing costs after the September rate rise are shaping how much buyers can offer and how sellers negotiate.

Background

Melbourne property auctions have long been the dominant way homes are sold in the city, with clearance rates tracked weekly as a barometer of market conditions. Auction clearance rates tend to fall when interest rates rise, as buyers face higher repayments and tighter borrowing limits. Victoria has been introducing reforms to improve transparency and fairness in property sales, including changes to how auction reserves are handled.

Key Perspectives

Agents: Jellis Craig Moonee Valley's John Morello said the market was offering good opportunities for those looking to upgrade, suggesting a normalising market can favour buyers. Buyers: First-home buyers and upsizers were active, with a Footscray property taken by first-home buyers after a single bid, indicating some buyers see value in the current conditions. Sellers: Homes passing in and selling below reserve, as happened in Essendon, point to sellers needing to adjust expectations to meet reduced buyer budgets. Critics and skeptics: A clearance rate below 60 per cent, with withdrawn auctions counted as unsold, may signal softening conditions that could persist if borrowing costs stay elevated.

What to Watch

  • Whether next week's clearance rate, the first under the new reserve disclosure rules, shows a change in auction activity or sale prices.
  • How often properties pass in and sell during post-auction negotiations rather than under the hammer.
  • Whether buyer hesitation deepens if interest rates remain high or rise again.

Sources

Zotpaper

Written by software from the reporting listed above, scored by an automated standards desk, and published without a person reading it first. If something here is wrong, tell the editor and it will be put right.

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