Australian auction rates are falling and home buyer activity is beginning to slow. This is unseasonal activity given that Spring is traditionally one of the best times for real estate sales.
eChoice has noted that auction rates have slowed over the last two weekends, when these should have been two of the most favourable weekends for home sales.
“Sydney, traditionally Australia’s hottest property marketplace, has recorded its tenth week in a row of auction clearance rates under 80%, according to a recent CoreLogic report,” said eChoice general manager of sales and distribution, Paul Liccione.
Mr Liccione said, “Prices in some markets will plateau and the effects of the investor – lending squeeze will begin to influence buyer and seller behaviour.”
However, in saying this, Mr Liccione said that while this may sound ominous, it is also a time when mortgage brokers and their existing and potential clients should be looking for avenues of opportunity as the Australian real estate market enters a time of re-adjustment.
During the last week of September, national auction rates were recorded at 70.4% with 2,064 homes reported as going under the hammer. This was the 3rd lowest clearance rate recorded across combined capital cities, down from 71.2% from the week prior.
Australian capital cities recorded the following auction rates: Sydney 73.2%, Perth 37.5%, and Melbourne 73.3%. Brisbane recorded an auction rate of 52.3% and Adelaide 71.4%.
Sydney has recorded little change over the last eight weeks with the market consistently recording lower auction rates than at the start of the year. January auction rates were above the 80% mark. However, in saying this, the number of auctions held over the last two weeks was 1,008 and 1,075 consecutively. Twelve months ago 883 auctions were held with a clearance rate of just below 80%.
North Sydney and Hornsby had the largest volume of auctions in the closing week of September, with 183 auctions held. These two areas recorded a 76.8% clearance rate.
Sydney had 2,484 auctions on Saturdays during September this year. This was an increase of 771 or 45%, with only 1713 listed over Saturdays over the same time last year.
A number of inner and middle suburban areas, however, are recording higher auction rates. The city business district (CBD) and east areas recorded an auction rate of 84.1%, northern beaches 82.9%, inner west 77.9%, south 76.9%, lower north 74.2%, upper north shore 72.7%, Canterbury West recorded 57.1%, north west 54.3% and west 50%.
Lower auction rates are said to be having an impact on trend auction prices with the last weeks in September recording results of $1,117,500. This was down from $1,133,750 recorded the weekend prior, but was 16% higher than $977,625 that was recorded on the same weekend 12-months earlier.
Melbourne recorded a clearance rate of 73.3% in the last week of September, down from 74.3% the week previously. However, auction rates are marginally higher when compared to a 72.1% clearance rate that was recorded 12-months ago.
The next strongest performing area in Melbourne was the outer east, recording a clearance rate of 78.4%. The Mornington Peninsula recorded the lowest auction clearance rate with 60.6%.
108 auctions were recorded with 52.8% selling. 144 Auctions were held in the last week of September, compared to 179 the week prior which recorded a clearance rate of 50.3%. Of 154 auctions held at the same time the year prior, a 38.9% clearance rate was recorded.
The preliminary clearance rate for Adelaide was 71.4%, up from 62.4% recorded the week prior, and 68.4% the year before at the same time. The number of auctions held rose from 89 properties to 99 in the closing weeks of September. However, the Adelaide market was busier over the last 12-months of the year with 129 auctions held.
30 auctions were held in Perth with a preliminary clearance rate of 37.5%. The week prior a 54.2% clearance rate was recorded compared to 51.2% the year prior.
116 auctions were held in Canberra compared to 79 the week prior and 80% the same time last year. 57.0% were sold, down from 65.2% the week prior and last year’s figure of 58.2%.
There were 5 auctions held in Tasmania. Out of this number 1 property sold at auction.
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