This article is from the Australian Property Journal archive
AUSTRALIA capital cities saw their highest auctions clearance rate since October over the weekend, as the market continues to reawaken from its summer slumber.
The number of homes that went under the hammer nationally increased to 1,712 auctions over the weekend, up from 1,390 homes the previous week, and above levels a year earlier when 1,642 properties were auctioned, according to CoreLogic.
The preliminary clearance rate rose to 67.4%, the highest early result since the week ending October 20th, which was also at 67.4%.
“Finalised results typically revise lower, but the early trend is showing an improvement in selling conditions which might reflect some renewed confidence as the likelihood of interest rate cuts grows,” said CoreLogic research analyst, Caitlin Fono.
“As the number of auctions moves out of the seasonal slump, clearance rates become more meaningful, providing a less volatile outcome and better measure of the fit between buyer and seller expectations.”
She expects the volume of auctions will continue to trend higher, rising slightly this week to around 1,750 before jumping to around 2,450 next week.
Melbourne recorded the largest number of auctions, with 685 homes taken to auction last week, of which 68.4% have been reported as sold so far; the highest preliminary clearance rate so far this year.
The volume of auctions held across Sydney jumped from 453 the week prior to 642 last week, with the preliminary clearance rate coming in at 73.0%, the highest since the week ending September 8th.
Brisbane led the volume across the smaller auction markets, with 211 homes going under the hammer last week returning an early clearance rate of 50.7%, down from 58.7% the week prior. Adelaide saw 102 auctions for a 63.3% preliminary clearance rate, up from 61.7% the previous week which revised slightly higher to 65.3% on the final results. Canberra held 62 auctions, and so far, 64.1% have been reported as successful – down from 68.7% the week prior, which was revised sharply lower to 57.7%.
New listings across the capital cities are increasing at the fastest pace in six years, according to Domain, hitting record highs in Sydney, Melbourne and Canberra, as resilient values and the prospect of a much-anticipated interest rate cut entice sellers to the market.
Domain’s data is reflected in SQM Research numbers, which shows total listings grew by 4.5% in January, hitting 243,642 properties – 10.3% higher than a year earlier. Domain data shows total supply has risen for the tenth consecutive month. Along with stretched affordability, that has translated into the slowdown in price growth, and in some cities, price falls.
Domain expects increased supply to be a major reason while there will be a buyer’s market in 2025.
The most recent inflation data showed the underlying inflation measure had eased further, within touching distance of the Reserve Bank’s target band, and prompting most analysts and three of the four major banks to tip an interest rate cut at the RBA’s next board meeting over February 17th and 18th.
In a note to clients, Capital Economics Australia and New Zealand economist Abhijit Surya said that although the prospect of imminent rate cuts could temporarily buoy buyer sentiment, “we don’t expect a meaningful rally in the housing market given that affordability is poised to remain stretched by past standards”.
