More homes in Melbourne are being sold before auctions, as buyers rush to secure properties amid rising prices. Sellers are increasingly accepting offers before the auctioneer’s gavel strikes, reflecting a shift in market dynamics. According to data from PropTrack, there are 1,181 auctions scheduled this week, with another 1,204 planned for next week. The clearance rates are hovering around 75 percent, indicating a robust recovery in the city’s housing market.
Angus Moore, a senior economist at PropTrack, characterized the current market conditions as a significant turnaround after two sluggish years. “Market conditions are much firmer than they’ve been for quite some time,” he stated. “Clearance rates have been strong and, perhaps more importantly, prices are now recording steady, consistent growth.” This trend marks a departure from 2022 and 2023, when property values were either static or declining.
Competitive Landscape Drives Pre-Auction Sales
The competition among buyers has intensified, particularly in key price segments. Simon Murphy, a buyers’ advocate in Melbourne, reported a surge in pre-auction sales, driven by buyers eager to avoid missing out. “If someone falls in love with a property, they’ll still make a move,” Murphy explained. “But most buyers are missing out, with auctions regularly going $200,000 to $300,000 above reserve prices.”
This competitive atmosphere has prompted many sellers to accept early offers instead of risking the uncertainty of auction day. Murphy noted that agents sometimes misprice properties, leading to swift offers that meet or exceed expectations. “Every decision’s a gamble,” he said, emphasizing that sellers prefer the security of a confirmed sale over the unpredictability of auction outcomes.
The most competitive activity is occurring in the sub-$1.5 million bracket, where homes frequently exceed their quoted price ranges. “That’s the new norm,” Murphy indicated, adding that properties heading to auction are almost guaranteed to exceed their expected prices by significant margins.
Market Insights and Future Outlook
Amid these trends, concerns about underquoting persist. Murphy expressed frustration over the lack of trust in the market, citing inadequate enforcement by Consumer Affairs. “Let’s be real, there’s no trust left,” he asserted, noting that despite these issues, confidence is returning to the market. “All the quality properties are selling fast. The difference now is that people aren’t scared anymore; they just want to lock something in before the next price rises.”
With interest rate cuts beginning to influence borrowing power, agents anticipate continued auction activity into November as Melbourne’s housing recovery gains momentum. The market’s resilience and buyer enthusiasm suggest a promising outlook for the coming months, as both sellers and buyers adapt to the evolving landscape.
The surge in pre-auction sales highlights not just a shift in buyer behavior, but a broader transformation in Melbourne’s real estate market, as participants navigate a landscape marked by increasing demand and competitive bidding.
