Chilled Out

Date: 01/12/2015

Results for week ending November 29

Homebuyers must have been listening to Glenn Steven’s speech last week, because they sure seem to be following his orders to “chill out.” (More on that below.)

But there’s no time to waste for sellers. They continued their mad dash for the exits, as the combined capital cities nearly broke a record on auctions volume of 3,649.

The Stats

The stats show that demand in Sydney is still sliding wildly, as only 56.3 percent of auctions cleared. That’s a drop of three points since last week. With hefty supply of 1,284 auctions, sellers didn’t stand much of a chance.

After falling five points last week, Melbourne’s clearance rate held steady at 65.0 percent. That’s a solid effort, considering a whopping 1,828 auctions were scheduled – 300 more than the previous week.

Little changed in Brisbane, Adelaide and Perth. Core Logic RP Data had nothing to report in Tasmania, and failed to note the auction volume for Canberra.

The Graph

The Numbers

	Sydney	Melbourne	Brisbane	Adelaide	Perth	Tasmania	Canberra
Clearance Rate	56.3%	65.0%	50.0%	59.5%	34.4%	–	58.6%
Auctions	1,284	1,828	211	155	59	–	–

The Analysis

Glenn Stevens hinted after a recent speech that the RBA will hold off on cutting interest rates. When asked about whether he was “still content with a two percent cash rate,” he offered the following teaser:

“February is three months away, we’ve got Christmas, we should just chill out, come back, and see what the data says.”

Unless the RBA surprises us this afternoon, expect further chilling in the property market as well. Before we see a rise in auction clearance rates, regulators will need to breath some life back into the lending market.

What It Means For Investors

Since the last thing the RBA wants is to further fuel a real estate bubble, don’t expect borrowing costs to go lower anytime soon. Even if the RBA does cut the cash rate, APRA will stand ready to keep investors on ice.

For the historical data of weekly auction clearance rates, click here.

By Jason Staggers

Jason was a personal mentor working with Steve McKnight's Property Apprentices. He helped hundreds of investors apply Steve's teachings in the real world and achieve greater results on their journey to financial freedom. Jason now lives in Perth, WA where he leads Neuma Church.