While homebuyers’ spirits might have been dampened by the rain as they sheltered under umbrellas as auctions across Melbourne last weekend, vendors on the other hand had cause to be singing in the rain, with a higher proportion of properties selling at or above their reserve price for nearly a year.

The Real Estate Institute of Victoria recorded a clearance rate of 62 per cent last weekend from 797 auctions. It follows a similar rate the weekend before. The trend points to the residential home market finally picking up after being in the doldrums.

REIV spokesman Robert Larocca told Neos Kosmos that it was the first two weekends in a row that had delivered 60-plus per cent clearance rates for almost 12 months. “The fact that it has sat in the low 60s now for two weeks is significant because we haven’t seen that for some time,” said Mr Larocca.

“A strong market is when we see clearance rates in the 80s, and the high 60s and 70s is very healthy. We don’t want to overstate these most recent results. There’s still a long way to go but the market is clearly resilient.” Mr Larocca said that while the results would be met with pleasure across the industry, from agents to vendors, it was too early to suggest that the market had fully recovered.

“What we’re seeing so far this year, is that the strongest demand in Melbourne at auction is in the inner east, inner south and the north east, where clearance rates are 69 to 70 per cent.

“What the last two weeks’ rates show is that demand is improving. Does it mean that the market is fully restored and performing strongly? It doesn’t,” said the REIV spokesman. Peter Travlos, sales manager with Ray White Taylors Lakes, told Neos Kosmos that in Melbourne’s north west, the signs of recovery are dramatic, that modestly priced properties were moving and not only that, but realising greater than estimated values.

“We sell homes mostly in the $400,000 to $900,000 range. In our auctions in the last three weeks our clearance rate has been 90 per cent,” said Mr Travlos. “We sold a standard three bedroom home with study in Hillside. Its estimated sale range was $420k to $460k, and it sold under the hammer on the day for $495k, and that was $25k above the vendor’s reserve.

“Another example was a 4 bedroom property in Taylors Hill, another up and coming area with new homes, which is not traditionally auction oriented. The sales estimate was $400k to $440k, and that sold for $455k.

“For buyers that have been holding out, thinking that prices are going to go backwards, I think they’ve had a rude awakening. The graph upwards is definitely coming back.” Peter Travlos puts the previous slump in the residential homes market, down to a lack of consumer confidence instilled by the gloomy overseas economic news and its affect on the Australian economy. Its gradual upturn he says, relates to the number of properties now on the market “It has to do with stock levels, there aren’t as many properties on the market as this time last year, so it’s a supply and demand scenario.”