The year that was 2012 in Melbourne's $1 million-plus property market

Overall we feel the market in Melbourne's inner east has finished very strongly and on a positive note for 2012. By the bay is a different story, more positive than 2011, but not as strong as the inner east.

Year starts tentatively

After 2011 finished with a whimper, the market mood from buyers, sellers and agents in early February 2012 was fairly sombre. There was a feeling that things were not going to go well this year, and this was reflected in the lack of quality homes on the market, the lack of buyers willing to push past anything remotely heavy price-wise, and a number of fringe agents considering alternative professions.

The first test for 2012 was on February 25. The mood was actually more positive than it might have been, given the negativity around. Homes were selling, but they were mostly the well-priced A-graders in the early to mid-$1 million segment, where buying and selling wasn’t about a discretionary desire, but a physical or financial need.

One area that did live up to the sense of doom and the gloom in this early part of the season was the $3 million market, the top end. It was as dead as doornail in the inner east. And while bayside had a little oomph over $3 million, it wasn’t travelling particularly well either.

Sizzling super Saturday

But the big story was about super Saturday, October 27. More than 150 $1 million-plus auctions were slated for this day – the end of a clear four-week period after the footy finals. This was the big test – and by our standards it was a sizzler. Clearance rates were up over 70%, Bidderman (the average number of bidders at every $1 million-plus auction on the day) was at 1.8 and, of the 42 auctions we attended, seven were ‘volcanoes’ with four or more bidders. That was a significant improvement on the equivalent super Saturday last year (October 22, 2011), which had a clearance rate of just 43% and a Bidderman rate of just 1.3.

Then, following the Cup weekend, this optimism seemed to take a bit of a stumble. The stats didn’t look too bad, with clearance rates in the mid 60%, and Bidderman at around 1.5. But the market felt quieter than it should have been given the great run up. Deals were still happening but not at the same level of excitement as October and, as another November week passed, some in the market started to wonder if maybe super Saturday was a dream – that the market hadn’t really picked up and that we were going to limp into Christmas much the same as last year.