- If auction clearance rates — the rate at which properties sell at auction over a given weekend — are anything to go by, the Sydney and Melbourne property markets appear to be rebounding after more than 12 months of decline, helping boost national figures.
- Over the July 13-14 weekend, 77.2% of properties sold in Sydney (versus 46.9% this time last year), while 73.6% of Melbourne properties sold (compared to 56.2%), according to CoreLogic’s preliminary figures. Nationally 69% of auctions sold compared to 52%, albeit on lower numbers.
- While the final figures may prove slightly lower, they are the highest since April 2018 and the fourth consecutive week of strong auctions.
- Commentators have reasoned that the federal election result (which avoided changes to negative gearing), two consecutive interest rate cuts and a watering down of lending restrictions are behind the bump.
Falling property markets in Sydney and Melbourne may have finally bottomed out, with auctions selling strongly for the fourth consecutive week.
Take Sydney for example. On the same weekend last year, less than half of all homes (46.9%) that went to auction managed to sell. This year, more than three quarters (77.2%) sold, according to figures from property market researcher CoreLogic.
While not quite as large, Melbourne’s auction figures have impressed too, with 73.6% of homes selling compared to 56.2% last year.
Those preliminary numbers are expected to fall slightly but prove a marked improvement in the last 12 months, and helped drive the national figure to a solid 69%. The strength of those numbers has been credited to a federal election result that nullified proposed changes to negative gearing, two consecutive RBA interest rate cuts, and loosening of lending restrictions.
“The trend now is very clear with interim results in the 60s and 70s in the past four weeks and final clearance rates above 60 per cent for that period. This is significantly higher than the clearance rate of 52 per cent a year ago,” RiskWise Property Research CEO Doron Peleg said in a statement provided to Business Insider Australia.
While clearance rates prove strong, volumes remain low even by winter’s standards, with 324 fewer properties (27.5% less), going to auction than last year.
That could turnaround as optimism returns to the market in spring, with clearance rates tending to lead volumes higher or lower.
“However, further improvement in auction results and the turnaround in the market are likely to lead to an increased volume as sellers expect stronger demand for their properties and, therefore, are more confident to put them on the market,”
Canberra followed the two major markets upwards, while Brisbane remains down, and Perth’s market still looks to be struggling from the post-mining boom property slump.
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