Keep Your Chin Up Sellers

Date: 09/02/2016

Results for week ending February 7

After a six-week hiatus, the real estate market is finally coming out of its annual holiday slumber. Although auctions numbers are down from this time last year, clearance rates are up, showing that buyers are coming to the party, but sellers aren’t quite as keen.

The Stats

The combined capital cities clearance rate came in at a solid 71 percent, well above the 60.5 percent figure recorded just before Christmas, and four points higher than the same week last year. The strong result is likely due to the limited supply, as only 854 auction were held, down from 987 the same time last year.

Melbourne and Adelaide offered up the strongest results, at 80.1 and 79.4 percent respectively. The Victorian capital hosted only 262 auctions this week.

Sydney came in fourth place behind Canberra, and cleared just over 70 percent on 265 auctions. During the same week last year, Sydney buyers had 421 auctions to choose from, so vendor confidence now appears to be down considerably.

The Graph

The Numbers

	Sydney	Melbourne	Brisbane	Adelaide	Perth	Tasmania	Canberra
Clearance Rate	70.2%	80.1%	55.8%	79.4%	35.0%	50%	72.9%
Auctions	265	262	111	104	37	2	67

The Analysis

Until the holiday hangover lifts and auction numbers increase, we won’t really know what to make of this week’s higher clearance rates. As vendor confidence improves and all determined sellers come to market, we’ll get a much clearer picture of what to expect leading into autumn.

Keep an eye on Melbourne. The latest CoreLogic RP Data figures suggest that Melbourne has now overtaken Sydney as Australia’s hottest property market. Real estate prices in Melbourne grew 2.5 percent in January, while Sydney lagged behind at 0.5 percent.

What It Means For Investors

Although the RBA left rates on hold last week, currency traders are now pricing in an 80 percent chance of a rate cut within the next six months. But don’t expect banks to pass along much savings to homeowners. APRA Chairman Wayne Byres just announced that lenders will likely face “somewhat higher” capital requirements in 2016 due to changes in global financial regulation.

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.