There was a Thursday in October 2021 when I called six Zoom auctions in a row, on the hour. All six of them sold with multiple bidders.
Team Fetter/Sciola sold 32 properties in October 2021, our busiest month ever. By far.
It was an extraordinary market. A once in a lifetime market fuelled by cheap money, insatiable demand and an 18-month lockdown-induced bottleneck of activity, finally unleashed all at once.
In October 2022 things look a little different.
I called six auctions for the entire month. Half of them were very competitive, the other half not so much.
Our team sold just seven properties for the month, about 30 – 40 percent down on previous years, ignoring the anomaly of last year.
For the fin year so far, we are down 25 percent on volume compared to 2021, even considering that in September 2021 we were in lockdown and couldn’t transact.
But it’s not all bad.
We are still transacting at a healthy level. We’ve already sold 35 houses since July, which is well up on 2018, 2019 and 2020.
Our team clearance rate is over 80 percent, meaning that 8 out of 10 properties are selling on or before auction day.
We are getting just as many buyers through our campaigns as last year – on average between 30 and 40 groups.
Last year this was translating to three or more bidders at auction. Now it’s more like one or two.
Buyer activity is strong, yet buyer depth has diminished. Only the motivated buyers are bidding and offering. The rest are happy to observe but not participate.
Some of our properties have seen over 50 groups inspect and not a single bid at auction.
Buyers are far fussier now.
In 2021 a house could have several flaws and still sell above the odds. The fear of missing out is a great driver of compromise and motivation.
In 2022 a house needs to tick twice as many boxes and represent great value for buyers to get excited about it. The fear of overpaying is a great driver of hesitation and inaction.
But buyers needn’t be concerned about overpaying. The best time to buy is when others are hesitating – when there is less competition.
These fearful predictions of the market dropping by a further 20 or 30 percent are fanciful, in my opinion.
The market has already corrected and is now levelling.
Prices have been slowly easing for 12 months already. The stats lag. November 2021 was the peak.
Prices in Melbourne stabilised in October, according to the PropTrack Home Price Index – the first month since March where they haven’t fallen.
The clearance rate has improved in recent months, with Jellis Craig averaging 75 percent since September.
Vendors are adjusting their expectations and meeting the market.
Meanwhile in Stonnington, stock remains incredibly tight. Good houses in good streets are more sought after than ever. I’m yet to see an A-grader go cheap.
The only factor that could put some serious downward pressure on prices would be a huge and unexpected influx of new listings. And while this would be great news for buyers and agents, it’s just not going to happen.
Feature Property: 90 Sutherland Road, Armadale
David Sciola 