This weekend’s auction results – Strong demand but low supply keeps driving our markets on Saturday October 12th

Auction clearance rates around Australia were once again strong this weekend, driven by strong demand at a time of low supply.

While some agents called it a Super Saturday of auctions because the  number of properties going under the hammer was higher that we’ve been experiencing for a while, the level of good quality stock offered is still much lower that during the heady days experienced a few years ago (2013 -17) but has increased to levels approaching those of 12 months ago.

In the meantime, the markets continued to show strength this weekend, confirming increasing buyer confidence in our property markets and sellers are also returning to the market.
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The following graphic from Domain shows how our markets are moving from strength to strength on Saturday 12th October.

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.

Here are the auction clearance rates as reported by Domain

Melbourne real estate auction results

This was a much busier auction weekend in Melbourne.

The preliminary auction clearance rate for Melbourne as reported by Domain today was a strong 74.6% (the same as the preliminary figure last week) with 850 were properties listed for sale under the hammer (more than the 718  week) and so far only 594 results have been reported and 29 properties were withdrawn from sale.

The final clearance rate is likely to drop to below 70%, much like last weekend’s final auction clearance rate which was revised to 67.4%.

Realestate.com.au reported that there were also 889 private sales in Melbourne this week, almost 10% more than the number reported last week – 819

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 47.2% and 863 properties were listed for sale by auction.

In 2017 (just as the Melbourne property market entered its slump phase) the clearance rate was  71% with 1,016properties listed for auction.

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 strong 78.8% with 626 properties listed for sale under the hammer  (only 199 last week because of the long weekend) and so far 414 results were reported and 29 properties were withdrawn from sale.

The final clearance rate is likely to drop to around 73-75 % – possibly a little higher than last weekend’s final auction clearance rate which was revised to 72.1%.

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 961 private sales in Sydney this week  – significantly less than reported last week – 1,291

A year ago in 2018 the auction clearance rate was 45.2% on 552 auction listings.

In 2017 the clearance rate was 60% with 715 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 trends.

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.

However the number of properties listed for auction 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.

These strong results occurring week after week are another confirmation that 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, however tighter credit and soft economic conditions will constrain property price growth after the initial post election bounce.

And with this month’s interest rate cut  and another almost certain early next year, the markets will continue to strengthen.

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.

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

Weekend Listings Rise Welcomed By Auction Buyers.

Hungry home buyers were presented with an across-the-board rise in capital city auction listings at the weekend with continuing high clearance rates indicating underlying current depth to demand for properties.

Auction numbers are now approaching last year’s levels at the same time with sellers increasingly keen to take advantage of the strongest market conditions since 2016.

Latest ABS home data for August reported another predictable rise in residential loans approved over the month with some early indications that investors are returning to the market – albeit from a low base.

Sydney Market Bounces Back Strongly After Holiday Break.

The Sydney weekend home auction market has bounced back strongly following the previous weekends holiday break with a booming clearance rate despite a surge in listings .

Sydney recorded a clearance rate of 80.8% on Saturday which was higher than the previous weekend’s 77.9% and well ahead of the same weekend last year’s 51.0%.

Auction numbers were predictably higher at the weekend with 626 reported listed compared to the previous weekends holiday-impacted 198 but also higher than the 550 reported over the same weekend last year.

Sydney’s median weekend auction price of $1,153,500 was lower than the previous weekend’s $1,220,000 but higher than the same weekend last year’s $1,132,500.

Most of Sydney’s suburban regions recorded strong clearance rates at the weekend with the exception of the South West.

The Central Coast and the South were both over 90% with the Inner West and Canterbury Bankstown just below at 89.0% and 87.8% respectively. Lower interest rates and higher prices are motivating sellers to take advantage of strong competition generally for Sydney homes.

First home buyers are also charging back into the market with more strong ABS lending results for this group over August.

Shane Oliver, Chief economist of AMP Capital tweeted the following graph

which show the clear spike in auction clearance rates since the election

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 – September

 WATCH AND READ: Australian Housing Market Update October 2019 | PROPERTY INSIDERS VIDEO