Pre-Grand Final Supply Surge Still No Match For Buyers
Results for week ending September 25.
Auction volume increased substantially this week, aligning with the upcoming Grand Final and NSW Labour Day long weekend. A total of 2,445 auctions were held across the combined capital cities with a preliminary auction clearance rate of 78.3 percent. Last week, the final auction clearance rate was 76.2 percent on supply of 2,149.
The City Stats
Sydney remained in the 80s for an eighth consecutive week, where 930 homes were taken to auction and bidders posted a preliminary clearance rate of 84.4 percent. Last week, the final tally showed a clearance rate of 81.6 percent, with 815 homes auctioned. Over the same weekend last year, volume was still higher at 1,200 homes, and the clearance rate was lower at 71.7 percent.
Melbourne, still the busiest market with 1,090 reported auction this week, managed to post a preliminary clearance rate of 79.1 percent. Last week there were 965 auctions held and the final clearance rate was 77.8 percent. One year ago, sellers presented 1,201 homes at auction and 72.7 percent of those were successful.
Adelaide almost took out Sydney for the most successful market this week. The city was host to 126 auctions and 83.9 percent of those appear to have been successful.
The Graph
The Preliminary Numbers
Sydney | Melbourne | Brisbane | Adelaide | Perth | Tasmania | Canberra | |
Clearance Rate | 84.4% | 79.1% | 51.5% | 83.9% | 35.1% | 25.0% | 69.9 % |
Auctions | 930 | 1090 | 144 | 126 | 49 | 16 | 90 |
The Analysis
As you can see in the following chart from CoreLogic, the combined capital city clearance rate is pushing the all-time high four-week average of about 80 percent. Of course, the Sydney and Melbourne markets are driving this result.
While supply was higher this week in light of next week’s less-than-ideal selling weekend, volume remains lower than the same weekend last spring.
Only 74 auctions are scheduled for next weekend in Melbourne and 420 in Sydney, so it will be two weeks until we can gather enough data for another accurate read of the market.
What It Means For Investors
Don’t expect much to change unless and until APRA steps in to temper demand by tightening up the flow of credit into Sydney and Melbourne housing. With homes in desirable suburbs in short supply, and a seemingly steady stream of demand, expect prices to continue rising in our two largest capitals over the next few months.
If you’re in Perth or Darwin, it’s a different story. Sellers in Darwin in particular are doing it tough. According to the ABS, home prices there have fallen 6.5 percent in the past twelve months.
For the historical data of weekly auction clearance rates, click here.
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