This weekend’s auction results – very strong auction clearance rates this Saturday February 22nd

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.

Auction clearance results Melbourne Sydney

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

 

Auction clearance Melbourne Sydney Brisbane Adelaide Canberra

Melbourne real estate auction resultsMobile Melbourne

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So far only 832 results have been reported (unreported rate 24.4%) and 17 properties were withdrawn from sale, meaning the final clearance rate is likely to drop to around 75%, which will be a little higher than last weekend’s final auction clearance rate of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.

The following graph from Dr. Andrew Wilson of Auction Insider clearly shows how things have changed in the Melbourne property market over the last few years.

Melbourne auction trends feb

Sydney real estate auction results

Metropole Sydney

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.

The following graph from Dr. Andrew Wilson of Auction Insider clearly shows how things have changed in the Sydney property market.

Sydney auction trends feb

Commentary:

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.

house price growth

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.

Auction clearance results and house prices

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.

rate cuts drive our marketsSome 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

Melbourne auction results

Melbourne auction results

Sydney auction results
Sydney auction results

 

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Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and his opinions are regularly featured in the media. Visit Metropole.com.au


'This weekend’s auction results – very strong auction clearance rates this Saturday February 22nd' have 12 comments

    Avatar

    December 16, 2019 Cheshire Fili

    Hi Michael, what are your thoughts on Dualdwelling properties and the rental guarantees that some agencies offer. pros and cons pls.
    Thanks in advance

    Reply

      Michael Yardney

      December 16, 2019 Michael Yardney

      Steer clear of them they must be terrible investments for the developer to nee dto offer you this type of incentive.
      There is SO much written about this on the internet – I’ll do an article on this as well – but I’m glad you asked – don’t even consider either

      Reply

    Avatar

    November 24, 2019 Raj

    Hi Michael, would you help people from NZ to invest in the residential property or your services are only limited to Australians?
    Thanks Raj.

    Reply

      Michael Yardney

      November 24, 2019 Michael Yardney

      Raj

      Yes we help New Zealanders and we understand the special regulations that pertain to them – we’d love to help you – please leave your details here

      Reply

    Avatar

    October 7, 2019 Shirley Lee

    Hi Michael
    Thank you very much for your insight!
    I am looking for an apartment in Clayton for investment with a budget of $550,000. I plan to rent it to the students in Monash University. Do you consider it as a good investment?
    Please give me some comments!
    Shirley

    Reply

      Michael Yardney

      October 7, 2019 Michael Yardney

      Shirley – Clayton is not on my radar and students are not the best tenants – that’s a good budget – you could do a lot better

      Reply

    Avatar

    September 29, 2019 Trish Walls

    Are there any statistics collected or reported for the Gold Coast anywhere?

    Reply

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    September 2, 2019 Jeff Wright

    Thank you for this regular information re Auctions and auction clearance rates.
    But why do you continually leave Perth out !?

    Reply

      Michael Yardney

      September 2, 2019 Michael Yardney

      Jeff becuase of the very few auctions occuring in perth – the main providers of statistics don’t report Perth auctions

      Reply

        Avatar

        February 2, 2020 Jason

        HI Michael,
        With a total purchase of $3 million in Sydney, how many properties would you recommend with this budget and purchase for each (ie $1 million each for 3) and would you stick to apartments only?
        Thank you

        Reply

          Michael Yardney

          February 2, 2020 Michael Yardney

          Jason. It really depends on your circumstances, your investment goals etc. At that budget you couldmeither buy a block of apartments or 2 houses

          Reply


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