Both Sydney and Melbourne once again delivered boom time auction clearance rates despite significantly more properties put to auction this weekend.
Despite considerably more properties being put up for sale by auction clearance rates improved as the following graphic clearly shows.
There is no mistaking it – there is a lot of energy in the markets and this should continue well into the year considering the most recent strong finance pre approval data.
Sydney produced a very strong performance recording a preliminary clearance rate of 81.7%.
Melbourne auction clearance results were a little lower, but still at boom time levels of 79.2%.
Auction clearance rates very rarely get much higher than 80% – there will always be some properties that don’t sell on the day.
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 continual rising prices, despite the obvious concern about the bushfires, corona virus and overseas geopolitical issues.
Here are the auction clearance rates as reported by Domain
The preliminary auction clearance rate for Melbourne as reported by Domain today was a very strong 79.2% with 1,123 properties put to auction, considerably more than the 649 properties put to auction last weekend.
Clearly seller are feeling more confident and putting their properties up for sale.
So far only 832 results have been reported (unreported rate 24.4%) and 17 properties were withdrawn from sale, meaning the final clearance rate is likely to drop to around 75%, which will be a little higher than last weekend’s final auction clearance rate of 73.8%.
Realestate.com.au reported that there were also 979 private sales in Melbourne this week – up a little from 935 last week.
A year ago in 2019 the auction clearance rate was 46% and 944 properties were listed for sale by auction.
By contrast, this weekend in 2018 1,405 properties were auctioned and 65% sold.
Sydney real estate auction results
The preliminary auction clearance rate for Sydney as reported by Domain today was a very strong 81.7% with 826 properties put to auction, considerably more than the 506 properties put to auction last weekend.
So far 555 results were reported (unreported rate – 27.7%) and 42 properties were withdrawn from sale, meaning the final clearance rate is likely to drop to around 75%, which will be similar to last weekend’s final auction clearance rate of 76.2%.
Realestate.com.au reported that there were also 1,236 private sales in Sydney this week, much the same as the 1,226 private sales reported last week.
A year ago in 2019 the auction clearance rate was 52% on 670 auction listings.
By contrast, this weekend in 2018 979 properties were auctioned and 63% sold.
Both Melbourne and Sydney home auction markets started the year strongly and the depth of interest from home buyers and investors has kept auction results strong despite more properties being put up for sale. .
Buyer and now seller confidence has clearly regenerated with results continuing to track well above those recorded a year ago.
There is no mistaking it – there is a lot of energy in the markets of our 3 big capital cities and Canberra and this should continue throughout the year.
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 surged and are likely to hit new peaks in the next few months.
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.
The following graph from the ANZ bank shows how in previous cycles rising dwelling prices followed on from rising auction clearance rates, however tighter credit and soft economic conditions will constrain property price growth once Melbourne and Sydney regain their lost ground.
The 3 interest rate cuts last year and another one or two rate cuts likely this year means the markets will continue to strengthen.
See the graph from ANZ below which shows how interest rate cuts (red squares) led to rising property values in previous cycles.
If cheaper mortgage rates lead 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.
Some interesting charts courtesy of Dr. Andrew Wilson
The following charts clearly show the strength of the Melbourne and Sydney auction markets as at the end of December last year
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