Record numbers of mid-spring auctions are pushing supply ahead of demand with the spectre of higher mortgage rates now sidelining buyers and impacting market confidence.
Sydney, Melbourne and Adelaide reported decreases in clearance rates over the month, with Canberra and Brisbane recording only marginal increases compared to September’s results.
Capital city auction prices produced mixed results over the month with Adelaide up strongly, Sydney rising moderately but prices falling in Melbourne, Brisbane and Canberra.
Record seasonal auction numbers will continue to test capital city markets for the remainder of the year providing more competition amongst sellers and more choice for buyers.
Recent announcements by banks of higher mortgage rates will also impact buyer confidence with clearance rates to continue to track backwards in the Sydney and Melbourne property markets, although results in other capitals will remain largely stable.
Sydney auction clearance rates continue to fall sharply and are now well below those recorded over the same month last year.
The October clearance rate of 62.3 percent was again lower than the September result of 68.8 percent and well below the73.2 percent recorded over October last year.
The latest Sydney rate is the lowest for the year so far and also the lowest October result since 2012.
Auction clearance rates have fallen sharply since the peak of the market in May this year when an all-time record 83.3 percent rate was recorded.
High listings continue to test the Sydney market with a clear October record average of 814 weekend auctions being reported over the month – below the September weekend listing average of 854 but well ahead of the 585 conducted over October 2014.
Although clearance rates have again fallen sharply in the Sydney property market over October the median auction price increased moderately by 0.9% to $1,160,000 reflecting a larger proportion of higher priced properties engaging the market typical of the early spring market.
Sydney auction prices have increased by 20.2 percent over the past year.
Melbourne’s October auction clearance rate of 70.3 percent was down on the 72.6 percent recorded over September and also below the 71.7 percent recorded over September last year.
The October result was again the lowest reported by the local market for the year so far.
Lower clearance rates reflect the impact of high auction numbers that averaged 868 per weekend over the month.
Although average weekend listing numbers were below the 975 reported over the previous month and also lower than the 1031 averaged over October last year, this was a result of the scheduling of the AFL grand final in October rather than the usual September Saturday for the fixture.
Melbourne’s median auction price fell marginally by 0.3 percent over October to $807,500 but remains 7.1 percent over the median recorded over October last year.
Brisbane’s auction clearance rate increased slightly over October to 48.3 percent compared to the 48.1 percent recorded over September.
The local rate remains well ahead of the 42.4 percent recorded over October last year.
Rising auction volumes have been a characteristic of the Brisbane market for most of this year and October continued the trend. Brisbane averaged 127 auctions per weekend – up from the 123 averaged over September and well ahead of the 100 averaged over October last year.
Brisbane’s median auction price however fell sharply over October by 3.6 percent to $684,750 but is up by 1.4 percent compared to the $675,000 recorded over October last year.
The Adelaide auction market reversed the recent trend of rising clearance rates falling over October from 65.2 percent to 63.2 percent.
The October clearance rate is however well ahead of the 51.9 percent recorded over October 2014 and is also the highest recorded for that month since October 2007.
Auction volumes in Adelaide fell slightly over October averaging 66 per weekend compared to 68 over the previous month but ahead of the 60 averaged over each weekend of October 2014.
Adelaide recorded the highest increase in the median auction price over October of all the state capitals rising by 2.8 percent to $581,000.
Adelaide’s median auction price has now increased by 7.6 percent over the past year.
The Canberra home auction market reported the strongest result of all the capitals over October with the clearance rate increasing from 63.6 percent to 65.5 percent over the month. Canberra’s auction clearance rate is significantly higher than the 55.4 percent recorded over the same month last year.
The October rate is now below only that recorded by Melbourne with current trends indicating that Canberra may emerge as the strongest capital city auction market before years end.
The October result was also the highest recorded by the local market for that month since October 2009.
Auction volumes also continue to rise in Canberra with 50 listings averaged each weekend over October – up from the 47 average over September and well ahead of the 30 averaged over October last year.
Despite a rising clearance rate Canberra’s media auction prices fell by 3.2 percent over October to $660,000.
Auction prices however remain 8.2 percent higher than the $610,000 recorded over October last year – the second highest annual rate of growth of all the capitals behind only Sydney.