Melbourne’s auction market weakened in 2024, as house prices drifted lower and predicted interest rate cuts failed to arrive.
Fuelled by an oversupply of property, auction clearance rates fell to 57.2 per cent at the end of last month, down from 64.1 per cent in February, Domain data shows.
Melbourne property values fell by 2.3 per cent over the last year to November while the total number of listings increased by 5 per cent, CoreLogic data shows, which created an ideal buyers’ market.
It was a year of wins for families and first home buyers as investors fled Melbourne’s property market, but house prices weren’t always within reach for first-time buyers, with some turning to their parents for help.
The bank of mum and dad helped their adult kids purchase a two-bedroom townhouse in Fitzroy for $1.17 million at auction. In Frankston, a dad paid $680,000 to buy a house for his school-aged daughter amid fears she wouldn’t be able to afford a property in the future.
The year opened on an upbeat note as buyers expected interest rates to fall by the middle of the year. Despite changes to land tax for the owners of second homes – which came into effect on January 1 – in February, a keen investor paid $850,000 and bid against himself to purchase a beachside Middle Park apartment he had his heart set on.
By April, some real estate agents were counting fewer investors at auctions, with downsizers and first home buyers taking their place.
That month, a young couple beat 11 other parties to land the keys to their first home in Coburg, paying $1,256,000 for the three-bedroom house.
In Ashburton, a couple of grandparents paid $1.95 million for a freestanding townhouse to be closer to their grandchildren and help out with babysitting.
Vendors selling high-end homes in Melbourne’s most sought-after suburbs weren’t too bothered by softening house prices.
Former The Good Guys boss Andrew Muir sold his Carlton city pad for $6.5 million, while a pair of brick homes on a single block on Toorak’s St Georges Road fetched $8.9 million at auction.
Comedian Rhys Nicholson sold his three-bedroom “maximalist” home in Coburg for $842,500 in post-auction negotiations.
By June, rate cuts hadn’t arrived, but hopeful buyers thought cuts might come in the spring. They were willing to pay up for the most-sought after homes, but not for the rest, keeping downward pressure on prices.
First home buyer Juliana paid $980,000 for a two-bedroom Brunswick townhouse, and said she “completely overpaid” for the property.
Juliana competed against deep-pocketed bidders at auction in Brunswick in June.Credit: Wayne Taylor
Another Brunswick house that last sold for $75,000 in 1979 fetched $1,553,000 after a bidding war, while a young couple paid $1.8 million – $200,000 above reserve – for a spacious family home in Yarraville.
Not every home enjoyed auction success.
Take the period home in Seddon that passed in at $1.27 million after a single bid, and the Brunswick five-bedder that passed in at $1.62 million following two vendor bids. It later sold for $1.7 million.
At the time, Ray White auctioneer Jamil Allouche said buyers were holding out for rate cuts and becoming more cautious as listings increased, and many put in offers before auction or purchased via private sales to ensure they didn’t overpay.
“We’re seeing some caution with some buyers ... I’ve just seen a slight drop-off over the past eight weeks,” Allouche said in June.
Renovated family homes fared well, while buyers more interested in block size were happy to pay for their dream lot. Take the quirky Prahran home on a 482-square-metre block which sold for $2.89 million to a family with knock-down plans, or the run-down Collingwood terrace that “meant everything” to its migrant family vendors, which sold for $860,000 to a builder.
A $30,000 renovation paid off for Wyndham Vale vendors after their four-bedroom home sold for $580,000 in September. In Abbotsford, a colourful refurbishment drew a first home buyer, who purchased the two-bedroom house for $1,262,000.
Spring brought some big sales. Former AFL executive Ian Anderson sold his Albert Park Edwardian home to a young family for $6.25 million, making a $4.5 million profit. Eddie Perfect’s Brunswick East home sold in post-auction negotiations for $2,285,000.
As the auction season drew to a close, buyers became more competitive in an attempt to secure a property before 2024 ended. A local family won the keys to a five-bedroom Yarraville home for $2.62 million after a marathon auction, beating three others.
In Avondale Heights, five bidders battled for a five-bedroom home with a pool and tennis court. It sold to a young couple for $3,025,000, smashing the suburb’s previous record by almost $500,000.
Despite the late auction frenzy, some buyers opted to wait until 2025, when interest rates are predicted to fall.