Melbourne homes are still selling via online auctions – but experts tip they'll soon 'slow to a crawl'

The pandemic hasn’t yet hurt Melbourne’s auctions too badly. (Steve Russell, Toronto Star via Getty Images)
  • More than seven in ten Melbourne homes sold over the weekend, according to preliminary figures from CoreLogic.
  • Coming amid a flurry of online auctions and inspections, AMP Capital chief economist Shane Oliver said the rate would “slow to a crawl” in weeks to come.
  • As unemployment and rental vacancies rise, and immigrations remains on hold, the property market faces some major obstacles yet.
  • Visit Business Insider Australia’s homepage for more stories.

Even stage four restrictions haven’t managed to stop Melburnians from buying houses.

Over the weekend, 73% the capital city’s auctions sold, according to CoreLogic’s preliminary clearance rate.

While sale volumes remain limited – only 244 homes were scheduled to go under the hammer –it’s a strong result nonetheless for a capital city at the heart of Australia’s largest COVID-19 outbreak and the country’s toughest restrictions.

The limitations brought in on August 2 prohibit one-on-one inspections, pushing would-be buyers online, where auctions have taken place since early July.

Over the weekend, 45 Melbourne properties were withdrawn before the weekend had even arrived, with early figures suggesting just 15 didn’t sell. Though with 54 unrecorded results, the final clearance rate is bound to come in lower, with Domain figures – on even smaller volumes – suggesting a 60% clearance rate.

“Melbourne clearances likely reflect inspections pre-stage four [and it’s] likely to slow to a crawl,” AMP Capital chief economist Shane Oliver said.

He noted that the property market was still in the “twilight zone”, as mortgage repayment holidays and large-scale government programs like JobKeeper prop it up.

After all, it comes at the same time rents and some capital city prices continue to fall on the back of rising unemployment, mass vacancies and an immigration flow turned off at the tap.

Melbourne and Victoria are hardly alone in that regard. Capital city markets remain a mixed bag at present, with nearly 66% of homes in Sydney and 47% of those in Brisbane selling over the weekend, according to CoreLogic’s preliminary figures.

However, it’s a far-more closely watched number that could determine where the country’s property markets go from here. Recording 322 new COVID-19 cases on Monday, Victoria’s coronavirus outbreak will for now be one of several factors determining confidence and restrictions in other states.

With its six-week lockdown set to cost the Australian economy up to $12 billion, so too will it decide the ongoing economic impact, as well as the pressure mounting on the federal government to extend support to homeowners and tenants.

Throw in an extended recession and forecasts of 10% price falls don’t look unreasonable.

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