Auction clearance rates around Australia were mixed this weekend with Melbourne having a break for the AFL Grand final, while Sydney experienced a super Saturday.
The markets continued to show strength this weekend, confirming increasing buyer confidence in our property markets.⠀⠀
Sellers are also returning to the market (particularly in Sydney), but the overall number of properties going to auction is still low compared to a year ago.
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The following graphic from Domain shows how our markets are moving from strength to strength on Saturday 28th September.
Add to this increased asking prices, higher median prices and more buyer interest – there is no doubt are markets have turned the corner – in fact the Melbourne and Sydney markets bottomed out around in June this year.
This reflects what our teams at Metropole’s offices in Melbourne, Sydney and Brisbane are finding on the ground – increased buyer enquiry and strong general interest in our housing markets because of the expectation of rising prices. ⠀
The prospect of easier access to finance, falling interest rates and a tax cut has boosted buyer confidence, driving strong auction results across Australia.
However the number of properties offered for auction was once again low this weekend and it will be interesting to see what happens in the Spring selling season, but with these types of results more sellers are likely to be prepared to place their properties on the market.
Here are the auction clearance rates as reported by Domain
Melbourne real estate auction results
This weekend was very quiet on the auction front because of the AFL Grand Final.
The preliminary auction clearance rate for Melbourne as reported by Domain today was still a very strong 77.5% but only 49 were properties listed for sale under the hammer (925 last week) and so far 36 results were reported and only 4 properties were withdrawn from sale.
The final clearance rate is likely to drop to around 73-75 %, a better result that last weekend’s final auction clearance rate which was revised to 72.4% but of course there were many more properties being put under the hammer.
Realestate.com.au reported that there were also 749 private sales in Melbourne this week, significantly less than the number reported last week – 939.
The year started with a typical Melbourne auction clearance rate in the 50%’s so there has been a significant increase in sentiment, especially since after the Federal election.
A year ago in 2018 the auction clearance rate was 39.4% and 36 properties were listed for sale by auction.
In 2017 (just before the Melbourne property market was just entering its slump phase) the clearance rate was 68% with 45 properties listed for auction.
The following graph from Dr. Andrew Wilson of Auction Insider clearly shows how things have changed.
Sydney real estate auction results
The preliminary auction clearance rate for Sydney as reported by Domain today was a very strong 78.1% despite a significant in crease in properties listed for sale under the hammer – 747 (543 last week) and so far 561 results were reported and 41 properties were withdrawn from sale.
Next weekend Sydney will be affected by their football Final.
The final clearance rate is likely to drop to around 74-76% considerably stronger than last weekend’s final auction clearance rate which was revised to 70%.
This year started with a typical Sydney auction clearance rate in the low 60%’s, so there has been a significant increase in sentiment.
Realestate.com.au reported that there were also 1,135 private sales in Sydney this week – a few less than reported last week – 1,363
A year ago in 2018 the auction clearance rate was 36.9% on 388 auction listings.
In 2017 (as the Sydney property market entered its slump phase) the clearance rate was 62% with 412 properties listed for auction.
The following graph from Dr. Andrew Wilson of Auction Insider clearly shows how things have changed.
Commentary:
Both Melbourne and Sydney home auction markets continue their strong trends but with mixed results due to the AFL Grand Final.
Sydney performed very strongly considering the Super Saturday surge in properties for sale.
These trends reflect what our teams at Metropole’s offices in Melbourne and Sydney are finding on the ground – increased buyer enquiry and general interest in our housing markets because of the expectation of rising prices.
However the number of properties listed for auction still remain low compared, meaning to get any clear trends we really need to see volumes of properties offered for sale at auction rising.
And in some ways this becomes a self fulfilling prophecy as with few “A grade” homes and very few “investment grade” properties for sale, increased buyer activity is pushing sale prices above vendors’ auction reserve.
Yet with these strong results occurring week after week it seems clear we’re past the market bottom in Sydney and Melbourne.
Buyers are back with a little FOMO (Fear Of Missing OUT) now that the media keeps reporting that dwelling values in Sydney and Melbourne have risen in each of the past two months ending a near two-year slide that saw prices tumble 15% from their July 2017 peak in Sydney and around 12% in Melbourne.
The following graph from the ANZ bank shows how in the past rising dwelling prices followed on from rising auction clearance rates.
And with another interest rate cut almost certain in either October or November, the markets will continue to strengthen.
If cheaper mortgage rates lead to rising property values, this will create a policy dilemma for the RBA which doesn’t really want this to occur, but clearly its focus is on jobs creation.
Dr Andrew Wilson, chief economist of MyHousingMarket.com.au comments:
Feast and Famine for End of Month Auction Buyers Auction
Buyers faced clearly different market conditions on the final weekend of September with a Super Saturday pre-long weekend holiday surge in Sydney contrasted by the virtual disappearance of Melbourne auction listings reflecting an AFL Grand Final distracted local market.
Despite the second highest listings weekend of the year so far, Sydney recorded yet another strong clearance rate indicating the robust level of underlying local buyer depth.
Low offerings can distort results but most capitals recorded relatively strong clearance rates regardless of distractions.
Buyers have clearly and predictably been activated by lower interest rates over the past three months with housing market confidence set to be further enhanced by the near-certainty of yet another rate cut next week – although likely another futile macroeconomic exercise by an increasingly perplexed and desperate RBA.
Shane Oliver, Chief economist of AMP Capital tweeted the following graphs which show the clear spike in auction clearance rates since the election – as well as how much lower the number of auction sales have been.
from Property UpdateProperty Update https://propertyupdate.com.au/this-weekends-auction-results-what-happened-in-sydney-melbourne-brisbane-adelaide-canberra/
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