Victorians breathed a collective sigh of relief when social distancing restrictions were eased earlier this month, including allowing up to ten people to gather together outside for recreational activity (a figure that will jump to 20 people per gathering from next week.) This has paved the way for public outdoor auctions to recommence in a modified form, and early signs show there are plenty of buyers willing to turn up in person on the big day.
Auctions held on May 16th were the first outdoor auctions held in the state since March 28th, and the clearance was down just 10% from the same time last year. It’s quite remarkable when accounting for a pandemic, and considering the fact that clearance rates were averaging around 30% just a month earlier. The following week, on May 23rd, the clearance rate had leapt to 70%, a huge increase on the 58% clearance rate recorded on the same weekend last year.
A significant number of Melbourne homes also sold above their reserve prices this past weekend, whilst an Albert Park property collected more than $9 million.
With 20 people allowed at auctions at one time from June 1st, we can only expect this upwards tick to continue, especially as local travel resumes and public pools, playgrounds and parks are set to reopen on this same date, restoring plenty of confidence in the market and in a return to order more generally. Once restaurants and cafes reopen on June 22nd, it will just about feel like business as usual, and we can expect employment and household income to steadily rise in tandem.
Earlier predictions that property prices would drop in April and beyond as a result of the virus have proven to be unfounded and at this stage, they seem unlikely to drop at all given the robust results we’re seeing so early in the reopening. If prices continue to hold steady, buyers will dive straight back in and vendors will see no need to delay.
Interest rates remain low, and if immigration also resumes earlier than expected, we should see the market bounce back much stronger and earlier than anticipated. As restrictions ease further in the coming weeks and months, we can only expect to see an increase in listings, more and more buyers turning up at auctions, and a market — and nation — once again celebrating its good health.