Drama Or Drama Queens?
Results for week ending June 28
Auction clearance rates remain stable across the country with an overall rate of 78.0%. Sydney and Melbourne recorded 83.5% and 78.5% respectively. Tasmania dropped back to its recent trend.
The Stat
Auction clearance rates report the number of properties sold compared to the number of properties offered up for auction. A figure of 80% and above indicates a strong performance. The real estate industry aims for 70%.
The Graph
The Numbers
Auction Clearance Rates | ||
| Week Ending 28/06/15 | Clearance Rate | Auctions |
Sydney | 83.5% | 887 |
Melbourne | 78.5% | 974 |
Brisbane | 51.1% | 140 |
Adelaide | 70.8% | 81 |
Perth | 57.1% | 29 |
Tasmania | 50.0% | 22 |
Canberra | 81.3% | 72 |
Source – Corelogic RPData | ||
The Analysis
In terms of the numbers not much has changed this week although it is fair to note that Sydney has steadily dropped back from an auction clearance rate high of 89% in early May. That’s not to say that this week’s result of 83.5% is a cool one – just that it’s come down off its peak.
Melbourne’s result of 78.5% remained steady and matched the results it’s been posting for most of the year. It will be interesting to see if it continues the same way next week as scheduled auctions are down 40%. However, next weekend is the middle of the school holiday period which gives context to the dramatic drop off in scheduled auctions.
What It Means For Investors
With continuing strong auction results and ongoing low interest rates, there is unlikely to be any dramatic change in the market in the near term. However, there are a growing band of voices, such as here and here, which see the markets coming off its peak in the not too distant future. If you read the previous links, you will have noticed that some assessments are more dramatic than others. And whether you read the signs in light of ‘drama queens’ or as ‘drama ahead’, the talk of a cooling property market does make people nervous. So what do investors do in such a climate? A good place to start is to pay attention to our investing mindset so we can know our goals, educate ourselves accordingly, and confidently decide which deals will suit our purpose.
For historical records of the auction clearance rates, please go to this page.
Comments
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Hi Andrew,
This “bubble” talk continues to be a very polarising thing, doesn’t it. Of the two links, I was quite agreeably surprised to see BIS talking “plain English” – to the point that I find myself agreeing with most of their commentary….
Not so with the first two economists though. I guess I don’t mind the “drama queens” personally – they force me to “check my own thoughts”.
But I do think their antics can have a hugely negative effect on newer investors who may be persuaded to “Wait” by these people, only to find their target properties move away from them as prices keep on going up.
Education is the key. This forum has its place in helping to cut thru the BS, and I am very pleased to be a part of it. Of course, “this forum” is a collective noun for “Those helpful members” who give their time and knowledge in posting replies – helping newer readers with so many aspects of property investing. And staff too, of course – it is an awesome collective !!
Hats off to all of you. Keep the good stuff coming,
Regards,
Benny