This weekend’s auction results – Clearance rates around Australia remain strong on Saturday September 14th

Auction clearance rates around Australia remained strong this weekend, confirming increasing buyer confidence in our property markets.⠀⠀

Sellers are also returning to the market but the overall number of properties going to auction is still low.
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However, the following graphic from Domain shows how our markets are moving from strength to strength on Saturday 14th September.

Add to this increased asking prices, higher median prices and more buyer interest – there is no doubt are markets have turned the corner – in fact the Melbourne and Sydney markets bottomed out around in June this year.

This reflects what our teams at Metropole’s offices in Melbourne, Sydney and Brisbane are finding on the ground – increased buyer enquiry and strong general interest in our housing markets because of the expectation of rising prices. ⠀

The prospect of easier access to finance, falling interest rates and a tax cut has boosted buyer confidence, driving strong auction results across Australia.

However the number of properties offered for auction was once again low this weekend and it will be interesting to see what happens in the Spring selling season, but with these types of results more sellers are likely to be prepared to place their properties on the market.

Here are the auction clearance rates as reported by Domain

Melbourne real estate auction results

The preliminary auction clearance rate for Melbourne as reported by Domain today was 76% with 757  properties listed for sale under the hammer (704 last week) and so far 574 results were reported and only 23 properties were withdrawn from sale.

The final clearance rate is likely to drop to around 70 – 72%. Last weekend’s final auction clearance rate was revised to 71%.

Realestate.com.au reported that there were also 810 private sales in Melbourne this week, a few less than the number reported last week – 830  last week.

The year started with a typical Melbourne auction clearance rate in the 50%’s so there has been a significant increase in sentiment, especially since after the Federal election

A year ago in 2018 the auction clearance rate was 50.2% and 937 properties were listed for sale by auction.

In 2017 (just before the Melbourne property market was just entering its slump phase) the clearance rate was  71% with 1031 properties listed for auction (considerably more than the current number of auction sales each weekend.)

The following graph from Dr. Andrew Wilson of Auction Insider clearly shows how things have changed.

Sydney real estate auction results

The preliminary auction clearance rate for Sydney as reported by Domain today was a very strong 77.5% with only 468  properties listed for sale under the hammer (447 last week) and so far 300 results were reported and 46 properties were withdrawn from sale.

The final clearance rate is likely to drop to around 72% – 74% – a very strong result indeed. Last weekend’s final auction clearance rate was revised to 74.7%.

This year started with a typical Sydney auction clearance rate in the low 60%’s, so there has been a significant increase in sentiment.

Realestate.com.au reported that there were also 1,136 private sales in Sydney this week  – much the same as reported last week – 1,204

A year ago in 2018 the auction clearance rate was 48.4% on 561 auction listings.

In 2017 (as the Sydney property market entered its slump phase) the clearance rate was 59% with 757 properties listed for auction.

The following graph from Dr. Andrew Wilson of Auction Insider clearly shows how things have changed.

Commentary:

Both Melbourne and Sydney home auction markets continue their strong upward trends but still on very low volumes of properties going to auction.

The number of properties going to auction seems to be lifting, especially in Melbourne and this could be the reason for the lower clearance rates there this weekend.

These trends reflect what our teams at Metropole’s offices in Melbourne and Sydney are finding on the ground – increased buyer enquiry and general interest in our housing markets because of the expectation of rising prices.

And in some ways this becomes a self fulfilling prophecy as with few “A grade” homes and very few “investment grade” properties for sale, increased buyer activity is pushing sale prices above vendors’ auction reserve.

However the number of properties listed for auction still remain low compared to previous years, meaning to get any clear trends we really need to see volumes of properties offered for sale at auction rising.

Yet with these strong results occurring week after week it seems clear we’re past the market bottom in Sydney and Melbourne.

Buyers are back with a little FOMO (Fear Of Missing OUT) now that the media keeps reporting that dwelling values in Sydney and Melbourne have risen in each of the past two months ending a near two-year slide that saw prices tumble 15% from their July 2017 peak in Sydney and around 12% in Melbourne.

The following graph from the ANZ bank shows how in the past rising dwelling prices followed on from rising auction clearance rates.

Recently RBA Governor Phillip Lowe reiterated his desire to lift inflation by increasing employment, in essence confirming we will have further interest rate cuts which will only further fuel our property markets.

If cheaper mortgages leads to rising property values, this will create a policy dilemma for the RBA which doesn’t really want this to occur, but clearly its focus is on jobs creation.

Of course, the number of properties listed for auction in our two big capital cities remain very low compared to previous years, meaning to get any clear trends we really need to see volumes of properties offered for sale at auction rising.

Increased buyer interest and strong auction clearance rates should give sellers who’ve been holding off selling their homes some encouragement to put their homes on the market, especially since the winter lull over school holidays is now over.

At the same time falling interest rates and tax cuts on the way should bring buyers back into the market.

Dr Andrew Wilson, chief economist of MyHousingMarket.com.au comments:

Spring Auction Energy Rising – Nonsense Returns.

Auction markets produced more robust results for sellers at the weekend with the restored buyer confidence of recent months now predictably trickling its way into increased activity by sellers.

Listings numbers bounced back on Saturday with Melbourne surging to its highest levels since the pre-Queens Birthday Holiday Super Saturday on May 25th.

More data released this week confirmed the market revival clearly signalled by the strong and rising auction clearance rates recorded over recent months.

ABS home loans predictably surged over July reflecting the impact of rate cuts, an easing of lending conditions and rising confidence.

But also, equally predictably, is the re-emergence of the “bubble-inflating” lunacy from the usual suspects and reported in the usual places. Last month’s doomsayers turning into this month’s boomsayers – the cycle continues. Let’s hope this time it is greeted with the derision it clearly deserves

Shane Oliver, Chief economist of AMP Capital tweeted the following graphs which show the clear spike in auction clearance rates since the election – as well as how much lower the number of auction sales have been.

Melbourne Auction Result Commentary by Dr. Andrew Wilson

Big Auction Weekend For Melbourne’s East – But Listings Still Down.

Melbourne’s home auction market bounced back at the weekend with another strong clearance rate following the previous weekend’s month-low result Melbourne’s 77.3% clearance rate was higher than the previous weekends 74.7% result and remained significantly higher than the same weekend last year’s 55.0%.

Auction listings also bounced back at the weekend following the previous weekends decline but remain well below last year’s numbers at the same time 757 auctions were reported listed on Saturday which was higher than the previous weekends 704 but well down on last year’s 895 over the same weekend.

Melbourne recorded a weekend median auction price of $864,500 which was yet again higher than the previous weekend’s $852,500 but lower than the same weekend last year’s $880,000. Melbourne’s eastern suburbs continued to produce leading weekend auction clearance rates with the Outer East 86.9%, the Inner East 85.9% and the North East 83.1%.

Melbourne’s unit market reported a 82.0% weekend clearance rate – well ahead of houses at 76.0%

Latest ABS home loan data reflected the Melbourne market’s strong winter performance with total residential lending for VIC surging by 4.7% over July.

Sydney Auction Result Commentary by Dr. Andrew Wilson

More Strong Results For Sydney Auctions But Listings Still Weak

Although Sydney’s weekend auction clearance rate was the lowest recorded for 5 weeks on Saturday, it was nonetheless another strong result for sellers generally.

Sydney’s 77.6% rate was lower than the previous weekend’s spectacular 83.9% but as usual significantly higher than the same weekend last year’s 52.3%.

Sydney listing numbers trickled upwards at the weekend to 468 compared to the previous weekend’s 444 but remained well below the same weekend last year’s 556.

Sydney’s recorded a median auction price of $1,226,500 at the weekend which was higher than the previous weekend $1,200,000 but lower than the same weekend last year’s 1,322,500.

Canterbury Bankstown recorded another 100% clearance rate at the weekend followed by more strong results from the Upper North Shore and the Inner West at 89.1% and 87.8% respectively.

Sydney’s nation-leading housing market performance over winter was validated by latest ABS home loan data for July that reported an increase in total residential lending seasonally adjusted of 5.0% for NSW over the month – the highest of all the states

NOW WATCH AND READ: Will the high auction clearance rates really lead to double digit capital growth in property values?