The growth is slowing down and the market is more divided

In the previous post “Analyzing Melbourne’s Eastern Corridor Property Market: Insights from Suburban Data“, we investigated the property market by assessing the auction success rate within 3 groups of suburbs based on their degree of attraction to the Asian community.

Group 1: Forest Hill, Mitcham, Nunawading, Ringwood, Wantirna, Wantirna South, Wheelers Hill

Group 2: Ashburton, Camberwell, Glen Iris, Hawthorn, Hawthorn East, Malvern East

Group 3: Balwyn, Balwyn North, Doncaster East, Glen Waverley

Attraction ranking: Group 3, Group 1, and Group 2

Now the new set of sales data is available (between 27th May – 5th June). The auction performance results are shown in the following table.

We have seen early signs that the market is becoming more balanced between supply and demand. Key observations are as follows:

• We have seen drops in both auction success rate and auction success rate on the day across all three groups.
• Group 2 recorded the biggest drop since May, from 83% in May to 69% for auction success rate averaged in the last two weekends. If we only look at the figures from the past weekend, the numbers are even lower, 65% for auction success rate and 64% for auction success rate on the day. This is a solid sign that high interest rate is working and the market is becoming stable.
• Even though auction performances for Group 1 and group 2 are still very strong, but lower figures indicate less competition for each property went under the hammer, hence slowing property price growth is anticipated should this trend continue.
• The numbers also show the market conditions are more divided between Group 2 and Group 1&3. The auction success rate in Group 1 and 3 is now much higher than in Group 3.
• As the auction performance is deteriorating, more private sales are anticipated.

The latest data supports our forecast in post “How to sell a property in a market with increasing uncertainties“.