This weekend’s auction results – Another strong weekend for auction clearance rates | Saturday December 14th

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.

Sure the reported clearance rates were a bit lower than their highs of September this year, but that tends to happen as the auction season draws to a close for the year,

Sydney produced another very strong performance recording an 76% clearance rate.

Melbourne auction clearance results were a little lower but still a strong 72% despite the fact that almost 1,226 properties went to auction.

Clearly 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

Auction clearance results Melbourne, Sydney, Brisbane, Adelaide, canberra

Melbourne real estate auction results

The preliminary auction clearance rate for Melbourne as reported by Domain today was a strong 72% considering the number of properties (1,226) put to auction this weekend,

So far only 862results have been reported and 46 properties were withdrawn from sale.Mobile Melbourne

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 66%.

Realestate.com.au reported that there were also 1,103 private sales in Melbourne this week, a similar number 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 927 properties were listed for sale by auction.

In 2017 (just as the Melbourne property market entered its slump phase) the clearance rate was  63% with 1294 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.

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Sydney real estate auction results

The preliminary auction clearance rate for Sydney as reported by Domain today was a very strong 76% with 757 properties listed for sale under the hammer around 10% less than last weekend.Metropole Sydney

So far 530 results were reported and significant number – 74 properties were withdrawn from sale.

The final clearance rate is likely to drop to around 69%- 71% – much the same as last weekend’s final auction clearance rate which was revised to 71%.

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 1,353 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 37% on 539 auction listings.

In 2017 the clearance rate was 48% with 501 properties listed for auction.

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

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Commentary:

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 and this should continue well into next year

The latest economic news however remains underwhelming with the jobless rate rising, employment falling and wages growth declining – all likely to contribute to another cut in interest rates next February which will certainly help to keep housing markets ticking over.

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 five months ending a near two-year slide that saw prices tumble 15% from their July 2017 peak in Sydney and around 12% in Melbourne.

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.

house prices auction results

 

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.

rate cuts drive our markets

Commentary by Dr. Andrew Wilson

Andrew WilsonHome Auction Year Ends On A High

The last full weekend of home auctions for the year has produced more robust results with continuing strong clearance rates despite surging end of year listings.

Sellers have rushed back into the market over the past month with numbers well in excess of those recorded over the same time last year.

The current strong market conditions stand in stark contrast to a year ago when the market was sliding backwards sharply as a result principally of an unprecedented and clearly nonsensical fear campaign conducted in the media generally.

With underlying demand drivers remaining strong, particularly in Sydney and Melbourne, the clear prospects are for more robust growth into 2020.

The following tweet from Shane Oliver, chief economist of AMP clearly shows the market trends.

Auction clearance results Melbourne, Sydney, Brisbane, Adelaide, Canberra

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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About

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 – Another strong weekend for auction clearance rates | Saturday December 14th' have 10 comments

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    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

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    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


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