Property Market Tomb Still Empty

Date: 30/03/2016

Results for week ending March 27.

While only 533 vendors were keen enough to bring their homes to auction over the Easter long weekend, there were at least enough eager buyers to keep the clearance rate steady. Preliminary results show the combined capital city figure hit 69.5 percent.

The Stats

The most active market over the weekend was Sydney, where 332 auctions were held. The initial clearance rate appears to be 77.4 percent.

Melbourne is typically the nation’s largest auction market, but this week only 79 auctions were held. Based on the earliest projections, 74.1 percent received bids above reserve.

Perth’s clearance rate appears to have been the highest, at 80 percent, although with only six auctions held, it’s not an indicative result.

The Graph

The Numbers

	Sydney	Melbourne	Brisbane	Adelaide	Perth	Tasmania	Canberra
Clearance Rate	77.4%	74.1%	38.5%	66.7%	80.0%	*	*
Auctions	332	79	45	31	6	14	26

*No figures reported by CoreLogic RP Data

The Analysis

While few insights can be gained on a week with so few homes on offer, the fact that buyers were out bidding over the holiday weekend at levels consistent with previous weeks is an upbeat sign.

The RBA’s home lending statistics from last month likewise show no indication of a slowdown in the property market. While lending to investors has fallen sharply, the drop has been almost entirely offset by an increase in owner-occupier lending. The majority of Aussies continue to show little fear of debt, nor of a market correction.

What It Means For Investors

The RBA meets next week to consider a drop in the cash rate to a record 1.75 percent. Regardless of its decision, all indications are that central banks worldwide will continue to promote debt growth, which typically leads to asset and consumer price inflation.

The key question remaining is how regulators will attempt to steer excess credit away from our already inflated housing market, and whether they will be successful. If you know the answer, you’ve found the Holy Grail.

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.