It's now a seller's market in Sydney and Melbourne as a recovery gets underway

(Photo by Mark Metcalfe, Getty Images)It’s now a seller’s market. Photo: Getty Images.
  • Auctions look to be selling at their strongest level in more than two years, according to CoreLogic’s preliminary figures, with nearly 80% of homes selling nationally.
  • Sydney and Melbourne property sales are driving the trend, as a recovery appears to be underway.
  • That sustained demand has again put sellers in the driver’s seat, according to RiskWise Property Research CEO Doron Peleg, with the number of properties expected to pick up going into the spring season.

A recovery in Australia’s largest two markets is helping drive the national auction clearance rate to its highest level in more than two years.

Across the weekend, the national preliminary auction clearance rate — the percentage of homes sold at auction — came in just shy of 80%, according to property research group CoreLogic.

“[The] number of homes taken to auction across the combined capital cities increased to 1,412 this week — returning a preliminary clearance rate of 79.6 per cent — while the previous week saw 1,228 homes taken to auction returning a final clearance rate of 73.0 per cent, the highest final clearance rate recorded in over two years,” it said in a note issued to Business Insider Australia.

“Although the clearance rate across the combined capitals will revise lower as remaining results are collected, it will likely hold stronger than last week’s final.”

Auction clearance rates have soared in recent months (CoreLogic)

That’s largely on the back of strength continuing to return to Australia’s largest two capital cities, Sydney and Melbourne.

In Sydney, there were 500 auctions over the weekend, with 84.7% of those properties selling. Compare that to just 56.5% the same time last year, albeit against a higher volume of properties on the market.

Likewise, 79.7% of Melbourne’s 665 auctions sold, compared to 54.6% last year.

That’s enough to see sellers again wrest control of Australia’s largest markets, according to RiseWise Property Research.

“Clearance rates in the 80s put sellers in a very comfortable position. We are also seeing, from the independent source of the Westpac-Melbourne Institute, significant improvements in consumer sentiment in relation to house price expectations,” CEO Doron Peleg said in a note on the figures.

“In addition, when it comes to auction clearance rates in Sydney and Melbourne, we are seeing very clear signs of recovery. The trend now is very clear with interim results in the 70s and 80s over the past four weeks and final clearance rates in the 70s for that period.”

That should have a couple of consequences on the property market.

“The recent auction clearance rates and improved consumer confidence are creating a very clear trend, that will consequently lead to price increases and a rise in volumes, as sellers expect stronger demand for their properties and, therefore, are more confident to put them on the market,” Peleg said.

As spring fast approaches, volumes are expected to pick up, again testing the mettle of the market.

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