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Auction success indicates economic stimulus is working
With four out of every five properties taken to auction in Sydney over the weekend finding new owners, auction clearance results are creeping even higher across Australia’s major markets.
Auction success indicates economic stimulus is working
With four out of every five properties taken to auction in Sydney over the weekend finding new owners, auction clearance results are creeping even higher across Australia’s major markets.
A consistent trend where final clearance rates hold above the 70 per cent mark implies the market is responding to the stimulus of lower mortgage rates, improved sentiment following the federal election, and lower serviceability tests for borrowers, according to CoreLogic’s Property Market Indicator summary for the week ending 11 August 2019.
Low advertised stock levels are also contributing to the strong results, it was said, with 1,107 capital city homes taken to auction this week, compared with the same time last year, where 1,402 houses were up for grabs.
In preliminary figures, all capital cities combined returned a preliminary clearance rate of 70.4 per cent, higher than last week’s preliminary figure of 68.3 per cent, which was revised down to 66.4 per cent for final figures.
The strengthening weighted average results of late can be mostly attributed to Melbourne and Sydney, where both cities have consistently reported clearance rates above 70 per cent, the report flagged, over the past few weeks.
Here’s a breakdown by city:
Sydney
A number of Sydney’s sub-regions have pushed even higher than the 81.2 per cent city-wide statistic, CoreLogic’s data showed.
This came off the back of 365 auctions over the weekend, compared with last week’s 386, but successful clearances jumped almost 10 per cent from the previous week’s 70.9 per cent.
North Sydney and Hornsby was out in front at 90.5 per cent, with the Northern Beaches (87.5 per cent), Inner South West (87.1 per cent), Sutherland (85.7 per cent), the Eastern Suburbs (82.6 per cent), and the City and Inner South (82.4 per cent) all aiding in pushing the clearance rate average beyond previous weeks.
Compared to the same time last year, nearly 100 more auctions had taken place in 2018 (458 total) but resulted in a clearance rate of just 53.8 per cent.
Melbourne
The summary noted Melbourne as returning a preliminary auction clearance rate of 73.2 per cent, rising on last week’s final clearance rate of 70.9 per cent as property volumes remained steady.
The South East sub-region posted the city’s strongest results with a clearance rate of 87.2 per cent, followed by West Melbourne’s 79.6 per cent.
Year-on-year, the figures showed that for the week ending 11 August, 220 less homes were up for grabs compared to the same period last year, where 721 homes had returned a 58 per cent clearance rate.
Brisbane
In Brisbane, out of 53 total auctions, only 21 successfully found new owners through the bidding process.
It caused the city to return a clearance rate of just 39.6 per cent, which does show consistency in the Queensland market after the same week last year returned a clearance rate of 41 per cent.
Adelaide
Adelaide is also maintaining relative consistency over a 12-month period.
A clearance rate of 58.6 per cent was realised after 55 total auctions, after last year recording 67 auctions over the same weekend to achieve a 59.7 per cent clearance rate.
Perth
In Perth, just 38 properties went to auction over the week.
Returning a clearance rate of 23.5 per cent, the same period last year saw 29 homes go under the hammer with an auction success rate of 29.2 per cent.
Tasmania
Just four properties were up for grabs at auctions in Tasmania over the weekend, with only one ending in a successful purchase.
Canberra
A total of 56 properties went under the hammer in the ACT over the last week, with just over six from every 10 finding buyers, with a clearance rate of 63.8 per cent.
It’s 20 more houses than were up for auction this time last year, where a clearance rate of 56.3 per cent was recorded.
Regional centres
Unlike in previous weeks, all five regional areas returned statistically accurate numbers due to the large amount of properties that went under the hammer.
Geelong led the charge, with an 82.4 per cent clearance rate achieved from 21 total auctions.
The Sunshine Coast saw 35 auctions returning a 60 per cent clearance rate, while the Hunter Region was not far behind at 57.1 per cent from 34 total properties.
Wollongong’s 28 homes up for sale found auction success for just under half of its offerings, at 47.4 per cent, while the Gold Coast had a 40 per cent success rate from 36 possible auctions.
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