Summer is traditionally a period when activity in Australia’s housing market slows, but it’s not the case in 2016.
Last week was the busiest period for auctions in close to nine months across the nation’s capitals.
According to data released by CoreLogic on Monday, there were 3,411 property auctions held during the week, the highest number seen since March.
And, as opposed to what was seen earlier this year, clearance rates were firm once again, led by the Sydney and Melbourne markets despite an influx of stock on offer.
A preliminary national clearance rate of 74.6% was achieved, above the final 72.3% level seen in the previous week, continuing the pattern seen in the second half of the year.
“The combined capitals clearance rate has been tracking above 70% consistently over the past 20 weeks, with the clearance rate higher than 75% over eleven of the past twenty week’s,” said CoreLogic. “The last time the combined capital city clearance rate was tracking over 70% over the given period was in 2009.”
Now, like then, the strength has been assisted by lower interest rates, along with lower-than-normal properties being taken to auction.
As shown in this table from CoreLogic, the strength in the national figure was driven by Sydney and Melbourne, Australia’s most populous and expensive markets.
Just have a look at current clearance rates in those cities compared to those seen this time last year, and on increased volume. A stark turnaround in anyone’s language, and one that coincides with renewed activity from investors as seen in recent housing finance data.
Fitting with continued strength in clearance rates, capital city housing prices also rose last week, adding an additional 0.4% according to the separate capital city home value change index released by CoreLogic.
Prices rose by 1.1% and 1.0% apiece in Melbourne and Brisbane, with Sydney adding support with an increase of 0.1%. Those gains more than offset declines of 1% and 0.2% in Adelaide and Perth prices.
As a result of the weekly rebound, the national decline seen over the past four weeks slowed to 0.2%, leaving the year-to-date gain at 9.7%.
During this period, and explaining the strength in the weighted index, prices in Sydney and Melbourne have risen by 14.5% and 11.2% respectively.
Some believe that gains of such magnitude are unlikely to be seen in 2017. However, one recalls similar forecasts being offered this time last year following strong house price gains seen in the preceding 12 months.