A FOUR-BEDROOM townhouse on Joyce Avenue in Glen Waverley tells the story of Melbourne's softening auction market.

It was passed in for $650,000 without a genuine bid last weekend, much less than the $720,000 its owners had hoped for.

Eleven out of 19 homes put to auction in the suburb in the past three weeks have been passed in, most failing to attract a single bid.

The owners of Joyce Avenue bought it from a developer in March last year and - with all the costs of buying and selling - need at least $660,000 just to break even.
What was that again - paying rent is just "paying of the landlord's mortgage; money down the drain....etc.....etc

Melbourne is currently experiencing a glut of auction listings as sellers try to cash in on the surge in real estate prices.

In Glen Waverley, the clearance rate in the past three weeks has averaged just 42 per cent - and that suburb is not alone.

Brighton, Albert Park and Port Melbourne are more examples of suburbs where less than half of homes put to auction in the past three weeks have sold under the hammer.

Buyers advocate Mal James says the oversupply has caused a price correction of up to 10 per cent but many sellers are yet to lower their expectations.

''The market has definitely eased in the last three weeks - you can feel it,'' he says.

''There is so much stock out there at the moment and the market is not absorbing it up like it did in April when there were frenzied auctions.''

The proportion of auctions compared to private sales is thought to be higher than 35 per cent at the moment, indicating that sellers are confident of getting their price. Just 13 per cent of property was sold using auctions during the market correction of early last year.

Mr James said that with less than one bidder per auction currently in the City of Port Phillip, sellers may soon switch to alternative ways of selling. Auctions are already falling out of favour in the Stonnington and Bayside areas.

''The auction system is not firing and excess stock is not being sold post-auction,'' he said.

Mark Armstrong of Property Planning Australia agrees prices have softened slightly after many months of bullish results. He has also noticed an ebb in demand.

''There's no doubt the market is not as strong as it was,'' he said.

''It's a fantastic thing for buyers. They can overlook poor-quality or overvalued property because there are so many more options out there.''

Some agents blame the latter on the federal government's crackdown on foreign investment in existing residential real estate that was announced in late April.

Chief executive officer of Stockdale and Leggo, Peter Thomas, says the rule change has taken ''a lot of buyers out of the market'', especially in suburbs like Glen Waverley that were popular with overseas investors.

He says sellers could no longer expect the runaway results of late 2009 and early this year.

Source: The Age

HOME owners hoping to sell their houses in Safety Beach, Somers or Eltham should be prepared for quite a wait, with the suburbs topping the list of longest average time on the market.

Figures compiled for the Herald Sun also show Melbourne units are hardest to shift in Toorak, Mordialloc, Rosebud and Elwood, with the average time on the market ranging from 77 to 96 weeks.

Regional Victorian houses tend to stay on the market significantly longer than their city counterparts, with houses in Myrtleford taking an average of 145 weeks before they sell.

Real estate agents yesterday said the time it took to sell a property depended on several factors, but usually boiled down to sellers unwilling to back down from an unrealistic asking price.

Williams Batters managing director Bill Cook said the factors could range from the location to flaws in the property.


While units and houses in the high-end suburbs of Toorak, Brighton, Elwood and Port Melbourne made the list of areas with the longest average time on the market, regional real estate had longer average times.

Frollo Real Estate director Len Frollo, of Safety Beach, on the Mornington Peninsula, said this was because to sell in those areas was more a case of "supply and demand", with fewer buyers fighting it out over properties.

"One thing is for sure, and not all people realise this, but if Melbourne sneezes, then this area here catches pneumonia. Whatever happens in Melbourne, it's magnified here," he said. "Auctions, as a general rule, don't happen down here, because it's more supply and demand."