Could You Hear the Whimper?

Results for week ending December 20

After starting the year at a blistering pace, the property auction market crossed the 2015 finish line with a whimper. Sales peaked in April at 82.3 percent. By the final selling Saturday of the year, sellers recorded a combined capital cities clearance rate of 60.5 percent.

The Stats

As expected, volume was down significantly coming into the Christmas holiday. Only 410 auctions were scheduled for Sydney, resulting in a clearance rate of 60.3 percent. This was five points higher than the previous week.

Melbourne hosted more than twice the auctions than Sydney, but volume was nearly half of what it was the previous week, down to 882 from 1,572. The result was a slight increase in the clearance rate to 66.7 percent.

The Graph

The Numbers

The Analysis

We’ve seen the housing market cool over the past three months with the introduction of tighter lending policies for investors. But by mid-December, there were signs that the market may have found support as the falling clearance rate seemed levelled off.

What It Means For Investors

When auction activity resumes in late January, buyer sentiment will likely continue to be subdued. Unless interest rates fall further or chaos erupts overseas, we may very well see home prices remain flat through autumn.

The RBA will meet again the first Tuesday of February. Since Glenn Stevens seems to be happy with the value of the Aussie Dollar, there is only a 15 percent expectation of a cash rate decrease to 1.75 percent.

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.