Air leaks out of Melbourne's property market bubble, as clearance rate falls

Clearance rates have slipped, but does this mean the property bubble has burst? Source: Supplied

Auction clearance rates have stayed well above 70 per cent virtually all spring, despite record numbers of homes going on the market, according to figures compiled by national real estate statistics provider RP Data.

This week another 1161 homes faced auctions and 664 sold under the hammer.

But 332 properties failed to attract a buyer and passed in. The results of 165 auctions are yet to be submitted.

Last week senior industry figure Catherine Cashmore told the Herald Sun "air" was starting to leak from the homes market price bubble.

The independent buyers advocate and market analyst forecast a market price correction in early 2014.

"It does seem the air has come out of the market and that the less desirable stuff for sale has nobody competing for it as many people are feeling more price sensitive with all the costs of Christmas ahead and are adjusting what they are prepared to pay," she said.

Sweeney boss Darren Dean agreed only premium properties are selling under the hammer.

But he said vendors in Melbourne's west were still very hopeful of selling their properties in 2013 and the real estate group would keep working right up till Christmas. Sweeney has 11 homes listed to go to auction on December 22.

"A and A-minus grade stock is still selling with aplomb but what we are seeing is that any property with a chink in its armour has been noticeably effected in recent weeks.

"If it is C-grade, I suggest put your cue away this year and try again next year."

Feedback from agents in Melbourne's southeast suggests some vendors are watching the market's recovery and getting "ambition" with reserve prices, effectively killing auction bidding.

Agent Robert Cincotta from Ray White Oakleigh said buyers are "paying a premium for location" in suburbs including Chadstone and Oakleigh.

But any vendor with unrealistic price expectations will struggle because buyers are still faced with thousands of homes for sale.

"Today's buyer is very well informed about recent sale results and, even in a hot market, will not buy a home overpriced by $1 million."

The number of private treaty sales fell by almost 50 per cent this week; last week 2044 properties sold privately, this week just 1086.

Top 5 Auction Sales

15 Irving Ave Box Hill $6,000,000 First National Real Estate Lindellas - Box Hill

40 Terry St Balwyn $2,800,000 RT Edgar Real Estate Toorak

37 Ferndale Rd Glen Iris $2,580,000 Marshall White Real Estate Armadale

25 Adelaide St Armadale $2,415,000 Kay & Burton Real Estate

8 Lyndon St Camberwell $2,307,000 Marshall White Real Estate Hawthorn

Top 5 Private Treaty Sales

17 Uvadale Grove Kew $4,000,000 Jellis Craig

62 Glyndon Rd Camberwell $3,730,000 Marshall White

5 Hansen St Kew $2,826,000 Jellis Craig

8 Thomas St Kew $2,600,000 Jellis Craig

50 Lisson Grove Hawthorn $2,565,000 Jellis Craig