Melbourne’s property market decimated

According to Eliza Owen, Head of Research Australia at CoreLogic, the economic lockdown across Melbourne has decimated the city’s auction market:

The final clearance rate for Melbourne over the week ending 19th of July was 43.8%. This has fallen from 51.2% in the previous week and the low 60% range over the prior three weeks. The recent downwards shift in the Melbourne clearance rate reflects a similar trend of what was seen in the first round of social distancing across Australia from the 25th of March to early May.

From July 9th, the Melbourne and Mitchell Shire went into a 6-week lockdown. Until restrictions are lifted, auctions must once again be held remotely and property inspections will be by appointment only.

The past two weeks of auction results for Melbourne reflect a couple of patterns that emerged during the first round of lockdowns.

Withdrawn properties in Melbourne rise to 41.8% of scheduled auctions

The first familiar trend is a significant increase in the portion of properties withdrawn from auction. Amid the initial period of strict social distancing, withdrawn properties peaked at 64.7% of scheduled auctions across Melbourne, over the week ending 12th of April. This is shown in the graph below.

Prior to COVID-19, the 5 year historic average withdrawn rate for Melbourne auctions was about 3.0%. As of the week ending July 19th, the rate of withdrawn properties has once again started to climb, reaching 42.0%. This represents 209 auctions reported as withdrawn of the 498 auction results collected over the week.

A high rate of withdrawn properties reduces the clearance rate, and lowers volumes

Withdrawn auction results are counted as a ‘non-sale’ at auction. While this consistent methodology has allowed us to understand a true representation of the success rate of auction methods in particular, it does mean that the auction clearance rate becomes
limited as an indicator of demand.

The chart below demonstrates that auction clearance rates have been significantly impacted by the high rate of withdrawn properties. The Melbourne auction clearance rate has started to diverge from the Sydney results as the city endures a second round of lockdowns.

A high rate of withdrawn properties also reflects the relatively low level sold under virtual conditions, with vendors less willing to test the auction environment under lockdown. The physical restriction on auctions, as well as dampened consumer sentiment, will likely see auction volumes fall further in the coming weeks.

Despite the shock to the auction environment, a greater portion of properties sell under the hammer in the first week of lockdown 2.0 relative to the earlier lockdown period

The chart above shows the portion of scheduled auctions that sold ‘under the hammer’ (sold at an auction), versus prior to the auction and sold after auction.

Similarly to the first round of lockdowns, more properties have sold before auction across Melbourne, than via a virtual auction over the past two weeks. A property sold ‘under the hammer’ during a lockdown is assumed to be a virtual auction.

However, it is interesting to note that the negative shock to the ‘under the hammer’ metric is not as severe as it was in the first week of the first round of restrictions. In the week ending the 29th of March, the portion of properties sold at auction was just 9.2%. For the week ending 12th of July, the portion was 23.4%.

Given COVID-19 saw an adoption of online sales methods earlier in the year, real estate agents and auctioneers should be more prepared to pivot towards a ‘virtual’ auction environment and virtual auctions may be more successful this time around.

Furthermore, despite high levels of uncertainty, it is also interesting to see how quickly the auction market has rebounded as auction resumed across Victoria. If the last phase of lockdowns was anything to go by, the auction market and, more broadly, housing market activity, is likely to recover as restrictions are eased or lifted.

The below chart tracks Melbourne’s final auction clearance rate against dwelling value growth:

This data points to hefty price falls, which is already being reflected by CoreLogic’s quarterly price growth, which has fallen by 3.2% across Melbourne:

The outlook for Melbourne property is unambiguously poor, given the second lockdown, soaring unemployment and the city’s extreme reliance on immigration, which has collapsed.

Leith van Onselen
Latest posts by Leith van Onselen (see all)


  1. soaring unemployment

    Have the foreign “students” gone home or is he now working for $5/hour instead of $10/hour?

    • Working for food or lining up at the food vans and shelters that in a long time in the past (2019) would have feed the needy and homeless.

          • Dom
            It’s charity, might charge 1 dollar
            I’m not trying to earn money

            My concern has been if I serve a Brighton lawyer who has lost everything and his family they might try and sue me if they get sick once

            I hoping MB sponsors the van

            The BC soup van

        • C.M.BurnsMEMBER

          You’re missing a branding opp BC. Call your van “sun spots on a cloudy day”

          • Being Melbourne he will need to serve coffee to all the unemployed baristas and barristers. There is a nice symmetry there

          • “A piccolo latte, single origin Costa Rican thanks”.

            BCNich jerks his head gruffly towards the trestle table.

            Big tin of international roast.

            Polystyrene cups.

            Plastic spoons.

            “You’re a barista. I’m sure you can figure it out”.

          • haroldusMEMBER

            The harsh glare of the sodium lights is softened by the persistent light mist. BCN’s face is caught in an eternal snapshot. Half smoked cigarette hanging out from the side of a mouth that has predicted an Untergang, sad eyes that have stared into the sun, and into the black hole after the sun.

            His heart, hardened by the hubris he saw only 18 months ago, is now softened by the desperate faces silently pleading from the broken windows of Cayennes, X6s and A7s.

            He does a quick calculation, and turns to the chopping block, skilfully gutting another ibis and slinging the pink and white mottled carcass into the bubbling stock pot.

            He ruefully grins to himself, knowing if he had managed to get the MB sponsorship, the “chicken” would have been real. Still, beggars can’t be choosers he thinks, ashing the nearly dead smoke out the window.

            The gaunt, needful crowd surges……..

          • haroldusMEMBER

            I had a very clear mental image of an exhausted yet vindicated BCN vainly trying to help the needy multitude, in a grim sort of Raymond Chandler dystopia!

        • Mike Herman TroutMEMBER

          Have you thought about what types of soup? Can I suggest a Mexican bean soup for the Mexicans? Good protein levels with a nice spicy kick…

  2. To decimate is to lose 10%. Or at least that’s the historical meaning. Melbourne is on target to double decimate. Where you at Peachy?

      • Hey blokes. I do remember schooling you on the origin and meaning of the term “decimation”, so I’m pleased that you’re now using it correctly.

        As far as I can see, so far the government has been pretty successful in lofting real estate prices over the biggest economic shock youse all could’ve dreamed of. If they keep their resolve and workrate, they will probably continue to be successful.

        If they stuff it up, we could be looking at 10% down, for sure.

        But I wouldn’t be counting them chickens yet. If there is one thing that the government machine has been good at, its getting land prices to inflate. It’s pretty foolhardy to expect them to botch it, given recent form.

        • Not this time peach
          The Anzac biscuit you owe me is a packet now
          And an ALDI boomer packet

          • Some ripping banter this AM

            Particularly about Haroldus’ and Ermo’s codependence.

        • BigDuke6MEMBER

          You are correct
          They will bankrupt the country – with the boomers blessing – to keep up RE.

        • Lol keep dreaming you got hold on to something it’s 30% over 4yrs but price dose not change much your real card peach

        • Display NameMEMBER

          You are right. But, in the medium term the current can kicking just exacerbates the final correction. We will have our bonfire, it may be just postponed. Again. I can wait.

      • haroldusMEMBER

        Nah remove one tenth, although there is some debate about whether that was the roman meaning, which I’ll look up tomorrow.

        • migtronixMEMBER

          If by remove you mean kill, yes.

          Decimation was the punishment suffered by an army squadron for some particular breach, the tenth soldier would be killed. Usually upto 80 people including the centurion but if it was bad enough could be a whole legion.

          “According to legend, the Theban Legion, led by Saint Maurice, was decimated in the third century AD.[13] The Legion had refused, to a man, to accede to an order of the Emperor, and the process was repeated until none were left. They became known as the Martyrs of Agaunum”

        • Sometimes decimatio was also used in combination with fustuarium though the latter has a interesting set of applications on its own.

      • McPaddyMEMBER

        Because words that once had relevance in the real world but no longer do (and haven’t for over a thousand years), never ever change their meaning or get used metaphorically.

    • That’s the Roman meaning. I’d like to see that to the investor class – repeatedly.

  3. The day of reckoning is coming for property punters. Sometimes when you punt you lose.

  4. sydney is not much better

    asking prices are being cut weekly while auctions are being under-reported

    • DX
      I said late last year that 2020 is the great Australian property crash Ireland 2.0
      It’s confirmed the great Australian property crash has started and my timing was correct

      *At the time i wrote it to GUNNA in Jan I said it will be a very sad and painful time

      Forget COVID, the depression, suicide livelihoods of families will be so much worse

      The depression and economic collapse in Melb and all the big cities in Aust behind but not as bad as Melb will be the worst ever experienced at any time in Aust history

      The heading will be the decimation of Melburnians forget property that’ll be the least of the problems Melb will experience

      • DominicMEMBER

        Speaking of Mexicans, I just want to say to all of them that it is cold and wet in Brissy right now — you really don’t want to come here.

        Adelaide is closer, sunnier and dryer — you’ll enjoy it much more. Enjoy!

        • The UsurperMEMBER

          Nah Adelaide’s just a country town. With lots of murder and drugs, I hear Perth is good.

        • You wait you are going to have melbournians walking around in Mexican hats, taco bills on each corner
          Also even worse Melburnians are really arrogant

          We used it all think you are all uncultured hill billies in SA QLD WA NT etc

          • Any state capable of producing Bundaberg Rum does not have an issue with culture. This fact is indubitable.

          • Swampy
            You better get gin on tonic with a twist of lemon or martini with an olive
            I’m not sure Melb people are tough enough for a bundy and coke

          • bcn – my background is born Bayside Mel (Sandy hospital), Macedon Ranges, Manangatang, NNSW. Victorian yes, Melburnian no.

            I am very ok drinking Bundy small batches neat.

            As for gin, well, Four Pillars neat for me, thanks.

          • Know IdeaMEMBER

            Any state capable of producing Bundaberg Rum does not have an issue with culture. In fact, it is not troubled by culture at all.

            Disclosure: after being born and raised in NSW, a large number of my immediate family members have moved to Queensland. I am now well acquainted with Bundy rum, firearms and banjos.

          • Born in Sandy hospital
            Maybe you were bwaaahaaa next to me
            My mum told me I was a very difficult child

          • Coronavirus free NT hill billy waves in a friendly manner at the septic pool that is Melbourne.

            “Y’all city folk don’t listen to good advice do ya?”

      • corona epidemic is the key to property prices in Australia but not because government measures destroyed the economy but because it provided perfect scapegoat
        it allowed government to bail out banks preemptively and blame something else for the crash … rich will benefit from property crash, not only by getting a new low entry point but also by making next boom cycle viable

        • BigDuke6MEMBER

          Someone gets it. Instead of hanging banksters and .govs from the yardarm the virus gets the blame.

        • Mike Herman TroutMEMBER

          am interested to hear thoughts on how the banks fare in a property “decimation”?

          • The banks will be come gov based digital currency follows maybe 5 to 10 years. all this will happen its been planned for 40 years now is the time to implement

          • Most of bank’s junk subprime mortgage loans are already or on the way to become property of RBA. Banks charge 3% pay RBA 0.25% and RBA takes all the risk.
            Once prices fall 50% or 80% banks will start issuing new prime mortgages to people to buy properties from RBA or blackrock or whoever buys them for peanuts from RBA and the cycle can repeat

      • McPaddyMEMBER

        People can face a fatal illness with much more equanimity than they can face being presented with the fact that their “wealth” was just a share in a moronic ponzi scheme and they were one of millions of rubes who just happened to be stupid enough to bet bigger than the other rubes.

        • That’s an excellent point. The last few decades were a fantasy. Straya is a fool’s paradise. Now the trd is beginning to crown.

  5. Guys
    It hasn’t even started in Melb
    Then mood is quite depressed here
    I’ve heard many are going to leave and sell their home
    There are so many projects about to finish
    Melb is going to lead the country down in prices
    This is the meltdown and it’s only just started
    The old Melb that was is finished
    Over the next few years population in Melb will fall 20/30 % say over 5 years
    By next year forget about auction clearance rates
    There won’t be buyers
    Melb will be like a ghost town
    The employment is moving to coastal and regional
    Property construction is going to boom in the regions
    Melb metro is finished
    Switch the city lights out

    Ps j spoke to a v experienced banker in Gold Coast who owns a home in Burleigh waters said GC prices down 5 to 10%

    • LittleEmperorMEMBER

      Chairman Dan’s $100 billion rail loop to nowhere not looking so hot now.

      • It’s a complete disaster
        The depression will be so bad in Melb it’ll force people tio leave for work
        Forget rail loop

        It’s the DOOM loop

        • I left for 3 years 80 to 83. Bought a Brunswick house in 81 for 29K deposit 17K Left Hellbourne 2000. In 2443 last 12 years best place in Oz secure job no worries.

      • DominicMEMBER

        A-ha, yes. In light of State gubmint employees scoring a 2-3% pay rise recently, we also have blowout deficits, declining revenues, so the question then becomes: when does the mass sacking of state (and Federal, for that matter) employees begin?

        Or perhaps ‘internal modeling’ has the economy roaring back to life soon, so that’s yet to be factored in …?

    • SupperannuationMEMBER

      I was thinking the other day what is the point of living in Melbourne if you can’t go anywhere. No one lives here because the weather is good and housing is cheap.

      • No footy no races no restaurants and cafes chapel st shopping closed
        Nothing here otherwise
        The exodus is already being planned

        We like the weather best in SA and WA but WA too far, Adelaide great weather too but Melbs won’t go there

        We need same time zone and no more than 2 hours flight

        The talk is South of Byron to Noosa

        GC most popular

          • Please do wait until I’ve spun my sale proceeds into a new house kthx. Apart from that, coolcoolcoolcool.

            I did to all y’all 3-6M ago buy now as stuff was on market for ages. It’s perked up a bit but.

            This one’s just down the hill and you could build a king wicked MTB park (or target range for LSWCHP).

            We could build a magnificent Lismore Cricket Ground and host the ashes, Covid free. It will be tremendous. As well as semi permanently relocating the Melbourne Football Club here to support the migrants. It would deal with out club base issues.

            LSWCHP you will let me know when you’re up, yes?

    • Where regional if you are arouns sydney?
      And does this then mean that the good schools and unis and work will be regional and not on the cities…

      • truthisfashionable

        Good call out. In NSW the top 50 or so schools are all Sydney based. If a regional exodus is to happen, where will the best schools end up? Families will be hugely aware that education will be the one thing needed to setup their children for the future.

        I do notice that Melb has plenty of good regional options only 2hrs away.

    • DouglasMEMBER

      BCN Anecdotal evidence commercial rental in Melb CBD was $926,000 dropped to $500,000 so capital values should follow and land tax ha ha should follow down but sleight of hand -Tim Pallas will probably not drop land tax. The Chinese bought a lot of city buildings and also industry super funds so watch the losses there.

    • Im looking in the same area(southern GC), in the 800k plus range, prices seem to be holding up there goin by real estate .com, iam not on the ground however. hardly anything on the market right now.

      • I think I’ve mentioned a few times – those who don’t need to sell – and there will be a not insubstantial number – just won’t. People who still want to buy, and there again will be a goodly number, will bid up the price of the on market stock. Watching it happen right now. That’s exactly how it is panning out not far south of where you’re looking.

        Anyway, the proof will be in the lower-JK-pudding come October, Xmas then March.

    • lols.

      Ok mate.

      “Property correction coming, frogs will fall from the sky, people will be dying in the streets, most likely with gnats ermerging from their eyes, subterranean giant flesh eating worms will devour anyone who remains, nature will retake the streets, can’t see anyone surviving”

      Property prices will correct, economic correction, migration will fall, everyone will be able to find jobs because – no migrants – stimulus, long term sustainable economy.

      You are so full of it BCN…. “I was the one who predicted the crash”.

      No – everyone did – absolutely everyone.

    • Hi BCN please can you advise what reverse impact this Melbourne bust will have on the sun?

  6. Coreilogic are saying it’s just the lockdown effect and demand will return to normal soon after. That is, temporary decimation.
    As usual, supporting their mates, the RE spruikers.
    You can’t trust them.

    • DominicMEMBER

      There are a lot of home owners hanging in there in the belief (hope) that the Gubmint will rise to the rescue.

      I’d be de-risking ASAP, personally, as ‘Hope’ is generally not a good investment strategy.

      • Arthur Schopenhauer

        Waiting for the Government to set favorable conditions has been a winning bet for 25 years. Not saying it’s the right bet now, but it does have logic.
        In NE Melbourne, suburban houses are still being demolished to make way for townhouses. That’s a pretty committed bet.

        • False.

          We have been entirely carried by China. End of story. Without China – government could do nothing, it was a secondary effect.

          • Arthur Schopenhauer

            I’m not disagreeing with you, just saying the average builder/developer has the strong sense the Government has their back.

  7. all this to save a few boomer lives. I hope Melbourinans think the trade-off is worth it. The longer this goes the more appealing the alternative of letting the virus rip and doing a Sweden.

    • billygoatMEMBER

      @um laut
      The lock up is not about saving boomers lives. They like everyone else will die anyway just sooner than the rest of us cos they’re older.
      Ninja masks & lockup simply props to legitimise Covid (crow) narrative /story/real life theatre that is really the fabled black swan except it’s a crow harbinger of death to your way of life ie re set. Covid Covert is the protective mist shielding masses from eco reset depression that ‘we had to have’ as it happens before their very eyes but they can’t see as so distracted by media updates & confusing detail & numbers. Nor can they smell the steaming $ hit sandwich right under their very nose cos they’re muzzled & desensitised by pointless medical mask. Non apetit

    • The sooner they let it rip (or “lose control of it despite best efforts”) nationally, the sooner they can open the borders and recommence the overpopulation.

      So be careful what you wish for.

      So many turkeys get so excited about Christmas… every fuсking time…!

    • 4 Million infected in the US with Carona. 175,000 dead.

      Extrapolate that out to the second world war and we have 1 Million dead Americans in 6 years – twice as bad as the death toll for the US in WW2.

      Extrapolate that out to the entire world and you have 278 Million dead.

      WTO just released a press statement stating that 1:4 – 25% of those in ICU around the world are under the age of 40.

      You are so ignorant it literally takes years off my life having to be on the same internet forum. Be quiet – you are too ignorant for words.

      • The FNG.MEMBER

        Libs face a bit of a conundrum here. Let it rip and they’re throwing their base (boomers) to the virus.

      • Can’t tell if you’re trolling or not. Let’s just extrapolate the f*ck out of everything.

        278 million dead out of the global population of 8 billion; that’s 3% of the world population right?

    • MountainGuinMEMBER

      Unemployment is going to be pretty bad by then so good luck trying to justify bringing in more workers who may or may not lead to more covid breakouts.

      • They’re not workers being brought in. They’re “students” – can’t you read the label on the bottle, buddy?

      • Arthur Schopenhauer

        It’s quietly seeping into the consciousness of the average Aussie that OS ‘students’ can work to support themselves here, for below award earnings.

        Been on the end of a Boomer rant, “Outrageous! Who coulda node! It’s all Labor’s fault!” 😀

          • haroldusMEMBER

            Well, that’s undeniable, but I was just curious – was it state or federal Labor? Federally they have been in control for 7 of the last 25 years.

          • Arthur Schopenhauer

            It’s cognitive dissonance. If it wasn’t Labor they’d have to vote for a non-LNP candidate and that would destroy their sense of self.

            It doesn’t really matter if it’s Federal or State. 😀

  8. Property boom starting to occur in SW WA. Gods own country and people are starting to realise how lucky we are.
    I see the age care facilities in Victoria are a bit like the school that can’t get mentioned…