Bigger crowds and optimistic buyers marked auctions across Melbourne at the weekend, the first since the re-election of the Coalition that pundits say has contributed to a feeling of confidence.

Last weekend, 711 auctions were held across Melbourne city, which represents the second-largest number of auctions in Melbourne so far this year.

According to economic pundits out there, the Coalition’s win coupled with the Reserve Bank’s hints of interest rate cuts and the loosening of lending criteria – which will enable borrowers to increase their borrowing capacity – one of the main reasons why we’re starting to see added confidence returning to the Melbourne real estate market.

Although, the auction clearance rate for Melbourne is certainly a bit higher than it has been for the past six months or so, it’s a good tentative sign the market may have bottomed or is what we are experiencing now just a ‘dead cat bounce’.   That’s the million-dollar question…

While it seems that selling agents are much happier now compared to 6 months ago, real estate prices in many suburbs across Melbourne are still 20% – 30% down from the record 2017 prices.  Speaking to many different selling agents on a daily basis, it does appear that more buyers are turning up at auctions.  But, with more buyers it unfortunately hasn’t necessarily resulted to an uplift in house prices and nor has it resulted in better bidding.

What Is A Dead Cat Bounce?

A ‘dead cat bounce’ is a temporary recovery from a prolonged decline that is followed by the continuation of a further decline in prices.  A dead cat bounce is a small, short-lived recovery in the price of a declining security, such as real estate or property.  Frequently, downtrends are interrupted by brief periods of recovery – where prices temporarily rise. The name “dead cat bounce” is based on the notion that even a dead cat will bounce if it falls far enough and fast enough.  And, there’s your answer!  Over the last 12 months or so, Melbourne has experienced its most rapid and steepest decline in property prices in its history according to the Victorian Government who released their budget for the year 2019-2020 only a couple of days ago.

What Does A Dead Cat Bounce Tell You?

A dead cat bounce is a price pattern used by technical analysts. It is considered a continuation pattern, where at first the bounce may appear to be a reversal of the prevailing trend, but it is quickly followed by a continuation of the downward price move. It becomes a dead cat bounce (and not a reversal) after price drops below its prior low.  However, if you’re buying a property and planning to hold onto it for the longer-term, a ‘dead cat bounce’ probably won’t have much impact.  The ones who have the most to lose from a ‘dead cat bounce’ are Short-term property traders such as property developers or house renovators.

Real Estate Market Prediction?

Unfortunately, one of the limitations of using the ‘dead cat bounce’ theory is that it can only be identified after the fact, which means that vendors or sellers will only notice a bounce after a steep decline may think it’s a dead cat bounce, when in fact it is a trend reversal – that is, instead of being a short-lived bounce, the rally may signal a prolonged upswing.  How can investors determine whether a current upward movement is a dead cat bounce or a market reversal?  If we could answer this correctly all the time, we’d be able to make a lot of money. The fact is that there is no simple answer to spotting a market bottom.

Why Use a Buyer's Agent in Melbourne?

Your Australian Property Buyers Agents lives and breathes property and knows the Melbourne Property Market! We at Your Australian Property Buyers Agents offer comprehensive end-to-end support from identifying and analysing your selected properties to dealing with selling agents, attending property inspections, purchase negotiations and / or auction bidding on your behalf. 

Our Independent Buyer’s Agents in Melbourne, will take the time to understand your situation and work out what your individual needs, specific requirements and property goals are, so we can begin searching for your next property. 

To get in touch with us today, please complete our Enquiry Form so we can discuss your objectives and outline our process in clear and simple terms.

What our Clients are Saying about Your Australian Property Buyers Agents

Your Australian Property Buyers Agents is a five-star rated business and it’s because we put our clients first. We promise to be responsive and to truly listen to what our clients need. We're surrounded by noise in the property market – Our goal is to cut through it.

With over 30 years of experience, we know what it takes to buy property seamlessly. Patience is key, but never at the compromise of confidence and our clients’ end game. We’re professional in every facet of our work, dealing with our clients with the utmost integrity and honesty.

When clients engage Your Australian Property Buyers Agents, they can expect Buyer’s Agents that are proactive and passionate. Combining a hard work ethic with passion and attention to detail, we help clients achieve their property goals with ease.

Your Australian Property Buyers Agents is a five-star rated business and it’s because we put our clients first. We promise to be responsive and to truly listen to what our clients need. We're surrounded by noise in the property market – Our goal is to cut through it.

With over 30 years of experience, we know what it takes to buy property seamlessly. Patience is key, but never at the compromise of confidence and our clients’ end game. We’re professional in every facet of our work, dealing with our clients with the utmost integrity and honesty.

When clients engage Your Australian Property Buyers Agents, they can expect Buyer’s Agents that are proactive and passionate. Combining a hard work ethic with passion and attention to detail, we help clients achieve their property goals with ease.

Next Step

If you’re Serious about Purchasing the Right Property at the Right Price, then Working with an Expert Buyer’s Agents is the Smartest Purchasing Strategy There Is!

Simply fill out the Enquiry Form below to get Started.

There were 711 auctions held in Melbourne last weekend ending 26^th May 2019 showing a clearance rate of 64% according to the REIV.  At the same time last year (May 2018) there were 979 auctions also with an auction clearance rate of 64%.  

Melbourne’s auction clearance rate of 64% suggests that the Melbourne property market may have bottomed out and is on the way up again.  Bigger crowds and optimistic real estate buyers marked auctions across Melbourne at the weekend, the first since the re-election of the Federal Coalition Government that many people are now saying why property may be the new flavour once again…

Although, things are now appearing much brighter and more positive than before for real estate, prices are still down 20% – 30% from their 2017 highs.  But the question which you need to seriously ask yourself is whether this increase in demand is fair dinkum or merely a ‘dead cat bounce’.  Given this recent increase in Melbourne’s auction clearance rate and buyer activity we’re now seeing, it could well be a ‘dead cat bounce’ which may be short-lived and temporary.  In any case, my take on things is that it’s still very much a buyers’ market out there in Melbourne which is fantastic for first-time home buyers and first-time investors.

Your Australian Property Tips #

Don’t be fooled by a lower price when assessing a property for potential purchase!  Firstly, make sure the property is the “RIGHT PROPERTY” first and foremost before you start concentrating on the price.  Remember, there’s always the hidden danger for buyers to either buy the wrong property or overpay for a property, as not everyone can buy the right property because there are only a limited number of them available.

Happy House Hunting!

Why Use a Buyer's Agent in Melbourne?

Your Australian Property Buyers Agents lives and breathes property and knows the Melbourne Property Market! We at Your Australian Property Buyers Agents offer comprehensive end-to-end support from identifying and analysing your selected properties to dealing with selling agents, attending property inspections, purchase negotiations and / or auction bidding on your behalf. 

Our Independent Buyer’s Agents in Melbourne, will take the time to understand your situation and work out what your individual needs, specific requirements and property goals are, so we can begin searching for your next property. 

To get in touch with us today, please complete our Enquiry Form so we can discuss your objectives and outline our process in clear and simple terms.

What our Clients are Saying about Your Australian Property Buyers Agents

Your Australian Property Buyers Agents is a five-star rated business and it’s because we put our clients first. We promise to be responsive and to truly listen to what our clients need. We're surrounded by noise in the property market – Our goal is to cut through it.

With over 30 years of experience, we know what it takes to buy property seamlessly. Patience is key, but never at the compromise of confidence and our clients’ end game. We’re professional in every facet of our work, dealing with our clients with the utmost integrity and honesty.

When clients engage Your Australian Property Buyers Agents, they can expect Buyer’s Agents that are proactive and passionate. Combining a hard work ethic with passion and attention to detail, we help clients achieve their property goals with ease.

Your Australian Property Buyers Agents is a five-star rated business and it’s because we put our clients first. We promise to be responsive and to truly listen to what our clients need. We're surrounded by noise in the property market – Our goal is to cut through it.

With over 30 years of experience, we know what it takes to buy property seamlessly. Patience is key, but never at the compromise of confidence and our clients’ end game. We’re professional in every facet of our work, dealing with our clients with the utmost integrity and honesty.

When clients engage Your Australian Property Buyers Agents, they can expect Buyer’s Agents that are proactive and passionate. Combining a hard work ethic with passion and attention to detail, we help clients achieve their property goals with ease.

Next Step

If you’re Serious about Purchasing the Right Property at the Right Price, then Working with an Expert Buyer’s Agents is the Smartest Purchasing Strategy There Is!

Simply fill out the Enquiry Form below to get Started.