Auction clearance rates around Australia were strong once again this weekend.
The year is finishing with auction markets producing remarkable results compared to last year with clearance rates sharply higher and increases in sales volumes, sales turnover and auction prices.
Sydney produced another very strong performance recording an 79% clearance rate.
Melbourne auction clearance results were the same as last week, a strong clearance rate of 74% despite the fact that almost 1,282 properties went to auction.
The following graphic from Domain shows how our markets performed on Saturday 7th December.
Auction volumes have now peaked and are falling away as we head towards the end of the year.
But lower interest rates and banks bigger appetite for lending at a time of increased consumer sentiment and confidence are driving our property markets.
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. ⠀
The prospect of easier access to finance, falling interest rates and positive media has boosted buyer confidence, driving strong auction results across Australia.
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 a strong 74% considering the number of properties (1,282) put to auction this weekend,
The final clearance rate is likely to drop to around 67% – 70 %, much the same as last weekend’s final auction clearance rate which was revised to 68%.
Realestate.com.au reported that there were also 1,053 private sales in Melbourne this week, the same as the number reported last week and similar to previous weeks
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 41 % and 1,029 properties were listed for sale by auction.
In 2017 (just as the Melbourne property market entered its slump phase) the clearance rate was 61% with 1487 properties listed for auction.
The following graph from Dr. Andrew Wilson of Auction Insider clearly shows how things have changed over the last few years.
Sydney real estate auction results
The preliminary auction clearance rate for Sydney as reported by Domain today was a very strong 79% with 806 properties listed for sale under the hammer around 10% less than last weekend.
So far 530 results were reported and significant number – 60 properties were withdrawn from sale.
The final clearance rate is likely to drop to around 71%- 73% – much the same as last weekend’s final auction clearance rate which was revised to 73%.
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 1,389 private sales in Sydney this week – much the same as been reported for the last month or so.
A year ago in 2018 the auction clearance rate was 40% on 717 auction listings.
In 2017 the clearance rate was 49% with 776 properties listed for auction.
The following graph from Dr. Andrew Wilson of Auction Insider clearly shows how things have changed.
Both Melbourne and Sydney home auction markets continue their strong trends.
Buyer and now seller confidence has clearly regenerated with results continuing to track well above those recorded a year ago, but the auction clearance rates are flattening a little.
There is no mistaking it – there is a lot of energy in the markets of our 3 big capital cities.
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 number of properties listed for auction is now levelling off as we reach the end of the year and these numbers still remain low compared the “good old days” (2013-17) but we can expect more properties to go to auction now as vendors feel more comfortable that their homes are likely to sell.
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 previous cycles rising dwelling prices followed on from rising auction clearance rates, however tighter credit and soft economic conditions will constrain property price growth as Melbourne and Sydney regain their lost ground.
With 3 interest rate cuts this year and another almost certain early next year, 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.
Commentary by Dr. Andrew Wilson
Some interesting facts courtesy of Dr. Andrew Wilson
The following charts clearly show the strength of the Melbourne and Sydney auction markets as at the end of last month – November
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