Melbourne auction versus private treaty numbers: REIV's Enzo Raimondo
Melbourne’s booming auction market, with a record 40,000 auctions last year, attracts headlines. But behind the scenes are the quiet achievers: private sales, actually the means by which most homes across Victoria, including in Melbourne, are sold.
While the number of auctions has grown, with vendors seeing the high prices obtained at auction by others and wanting that for their own home, more than 60 per cent of all sales in Melbourne last year were private sales. This resulted in close to 50,000 Melbourne homes being sold through private sale over the 12 months.
While auctions can be favourable to the seller, with the white heat of competition encouraging ever-higher bids and buyers to be highly assertive, private sales avoid that stress. They also allow a longer marketing period than an auction campaign, which is generally a month.
Traditionally outer suburbs and regional areas, where homes can take longer to sell than in the highly competitive inner suburbs of Melbourne, have been the main centres of private sale activity.
And last year was no different, with almost all of the top private sale suburbs in Melbourne’s outer region.
The trend has continued in 2015 – with the outer eastern, southern and western suburbs leading the way. Among those with the most private sales this year have been Frankston with 635, Pakenham with 620, Point Cook with 571 and Croydon with 470. Also on the top 10 list were: Mornington, Mooroolbark and Mount Martha.
The active property market in Mildura resulted in 560 private sales for that year, Victoria’s fifth highest total.
What may come as a surprise to some is the number of private sales in Melbourne city itself. In the city of Melbourne there were 717 private sales – a result of the large number of apartment private sales in Docklands and the CBD. Another top performer was the very large middle north suburb of Reservoir, which racked up the highest auction total for the year, and also had the eighth highest total private sales: 409.
While private sale levels are still extremely high, there has been a steady growth in auction levels statewide. So while in January and February last year just 12 per cent of all sales in outer suburbs were by auction, that had risen to 18 per cent in the first two months of this year. Areas with the largest increase in sales by auction included Rosebud, Craigieburn, Edithvale, Springvale and South Morang.
This reflects the value offered by outer suburbs, where population growth is leading to improved infrastructure including shopping centres such as the expanded centre in Craigieburn, transport hubs such as the station at South Morang to which the Epping line was extended, and recreation facilities.
Affordability is also a driver of outer suburban sales in 2015. Melbourne’s most affordable locations at present include Werribee, Hoppers Crossing, Carrum Downs, Wyndham Vale and Hampton Park.
While clearance rates – that is the percentage of properties at auction that sell – are a measure of the health of the auction market, days on the market are the comparable measure for private sales. All the suburbs in which properties sold fastest in February were in outer Melbourne – and, more specifically, outer eastern Melbourne. Top of the list was Croydon Hills with 17.5 days on the market, followed by Croydon South with 19 days and Montrose and Ringwood, both with 21.
Others on the list of the top 10 fastest selling areas were the Basin, Chirnside Park – the biggest improver compared with January, down by 2.5 days to 23, Mooroolbark, Yallambie, Scoresby and Kilsyth.
