Some of the hallmarks of a transitioning market

Melbourne’s property market has a different air to it this year. Last year, many agents talked about the limited buyer numbers, and the associated challenges with managing sales campaigns. Anecdotally, buyers were hard to pin down and campaign visibility was tougher for agents.

Auctions were often unpredictable, and higher numbers of auction pass-ins were a feature of 2024.

From our coalface, I could broadly anticipate that an auction campaign overview from an agent would likely over-estimate the buyers who they’d determined would bid. For example, if an agent cited four potential buyers, it was common for this actual figure to be two. If they cited three potential bidders, it was often just me who bid, and the property would then pass in.

However, this year feels quite the opposite.

Over the last two months, when an agent has cited their estimate on the number of buyers who they believe will bid, the actual figure has been greater. When an agent has cited three, the actual bidder numbers has often been four or five.

Auctions are well-attended, bidding is more spirited, and reserves are being exceeded in many parts of Melbourne. Our auction clearance rates are higher this year too.

An interesting observation relates to sales before auction. In a transitioning market, agents need to manage both the buyer and the seller nerves. In Melbourne, this is particularly noteworthy right now. Our market has been static for over two years, giving vendors and buyers some very consistent market conditions to become accustomed to. All of a sudden, things are a bit different and everyone needs to adapt. Agents are still conscious of buyers having a change of heart in the last days of a campaign. They are also noting that our stock volumes are quite healthy currently, and this can pose a threat to their vendor’s campaigns when a new listing pops up and catches their buyers’ attention.

Vendors are still nervous, noting how difficult the last three years have been. Most aren’t anticipating runaway auction results, in fact vendors seem quite prepared to accept a reasonable offer.

All of these factors contribute to a higher willingness on the agent’s part to act quickly and consider offers prior to auction.

Sometimes agents will bring a negotiation to a head earlier than the auction date. Typically, all interested buyers will be notified via sms of an acceptable offer and the agent may facilitate a boardroom auction, zoom auction, a negotiation back and forth, or a ‘best and highest’ showdown.

Other times, the agent may just adjust the auction date and bring it forward.

Buyers need to be prepared for the sale date to be brought forward in this climate.

Easter this year is falling later in April, followed by Anzac Day the following week. Between these two weekends (where auction activity is usually much lower), and our anticipated Federal election dates, auction volumes could surge again.

Until the stock volumes slow down into our Melbourne winter, this type of unpredictable campaign activity is likely to continue.