We had another weekend of strong auction results, in part because of increasing consumer confidence and partly because of our low interest rate environment.
On the back of this ANZ Bank’s latest housing market report is very positive:
Source: RP Data, ANZ
Daily RP Data home price indices show home prices posted solid weekly gains in the past week, with prices increasing in trend terms across all major capital cities. In seasonally adjusted terms, the strongest monthly home price gains to 22 September were in Sydney and Melbourne (+2.0% m/m), followed by Adelaide (+1.4% m/m). In contrast, home prices were lower in both Brisbane (-0.3% m/m) and Perth (-1.4% m/m). In the past year, Perth and Sydney have posted the strongest trend price growth (up 8.2% y/y and 7.7% y/y respectively), with more modest gains in Melbourne (5.4% y/y) and Brisbane (2.0% y/y). Meanwhile, home price gains in recent weeks have driven Adelaide annual trend price growth moderately higher (+0.4% y/y).
Auction demand and clearance rates remained extremely strong in both Sydney and Melbourne in the past week on elevated auction numbers. Sydney in particular posted the highest weekly clearance rate in the last 5 years at 88% while Melbourne’s clearance rate also posted a strong 77%. Of the other capital cities, auction activity in Adelaide remained solid, with 63% of auctions cleared, the eighth straight weekly clearance rate above 60%. In trend terms, auction clearance rates continued to increase in both Sydney and Melbourne (around 81% and 73% respectively) while Adelaide’s auction clearance rate has increased sharply in recent weeks to 64%. In contrast, trend clearance rates in Brisbane and Perth have remained largely unchanged in recent months.
Melbourne had a second consecutive week of strong auction sales in the week ending 22 September, with 972 auctions conducted (compared to 975 in the previous week). A further 744 auctions were conducted in Sydney (compared to 805 auctions in the previous week). While this week’s auction levels remained strong in both original and seasonally adjusted terms, auction sales in Melbourne are expected to temporarily weaken next weekend as the city’s focus turns to the AFL Grand Final. Looking through the short-term volatility, strong trend clearance rates and home price gains are expected to support solid sales levels across Melbourne and Sydney going forward.
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