It’s the end of summer in Australia, but as temperatures start to cool, one thing remains as hot as ever: the Sydney and Melbourne housing markets.
Whether measured by auction clearance rates or prices, they remain red hot.
Just take a look at the preliminary auction clearance rates for both Sydney and Melbourne last week for evidence. The chart comes courtesy of CoreLogic.
Both cities logged preliminary clearance rates of more than 80%.
Making those figures all the more impressive, and potentially worrying to policymakers, the result came despite a surge in the number of properties being taken to auction.
Nationally, 3,232 auctions were held across the nation’s capitals, with the vast majority taking place in Sydney and Melbourne.
“The record highs for the number of auctions were confined to the Sydney and Melbourne markets, where auction numbers were the highest on record for the month of February,” said CoreLogic.
Despite the increase in auction volumes, well above the 2,701 number held in the corresponding week in 2016, the preliminary national clearance rate still rose to 78.6%, the highest level in over a year.
It was also well above the 71.4% national clearance rate seen during the same period last year, thanks largely to the continued strength in the Sydney and Melbourne markets.
Canberra and Adelaide, at 77.3% and 76.3% respectively, also put in strong performances during the week, underlining that the strength in Australia’s southeastern capitals is not only strong but spreading.
Reflecting elevated clearance rates in Sydney, Melbourne and Adelaide, it perhaps came as no surprise that prices in each of these cities also outperformed other state capitals last week.
CoreLogic’s capital city home value index rose by 0.5%, led by a 1.1% bounce in Melbourne. Prices in Adelaide rose by a smaller 0.3% over the same period.
Prices in Sydney, up another 0.6% over the week, have now gained 2.7% in the past month, according to the index, leaving them up a whopping 18.2% from a year earlier.
Melbourne prices, up 12.3% over the past year, are now a distant second.
Simply enormous, even forgiving that some hold the view that the data is overstating the scale of the increase seen over the past 12 months.
Nationally, and reflective of not only recent price gains but also that Sydney and Melbourne are the largest housing markets in the country, median values have now increased by 11.5% over the past year.
Markets will get further information on this front later in the week, including the split between price movements for both houses and units, when CoreLogic releases its monthly Hedonic Capital City Home Value Change Index for February on Wednesday, March 1.
That will follow the release of housing credit figures for January from the RBA on Tuesday, February 28 — another release that will certainly garner some attention, particularly the split between owner-occupier and investor credit growth.