This article is from the Australian Property Journal archive
THE Melbourne and Sydney auction markets have recorded their lowest clearance rates in two months due to a surge in property listings.
Sydney’s market was back in business last weekend, following the Labour Day holidays. According to Australian Property Monitors, there were 747 auction listings and 533 properties went under the hammer of which 449 sold, resulting in a clearance rate of 79.3%.
The total value of auction sales was $455.7 million.
APM’s senior economist Dr Andrew Wilson said Sydney’s early spring home auction recorded its lowest clearance rate for two months.
“The 79.3% result broke a sequence of nine consecutive weekend rates above 80% and may reflect the exceptionally high numbers of properties offered for auction at the weekend.
“Although down on recent results, the weekend rate nonetheless remains a strong outcome with the Sydney market clearly remaining in favour of sellers with plenty of competition amongst buyers for available homes,” he added.
According to APM, Sydney’s four-weekend average clearance rate now stands at 82.0% compared to 82.8% over the previous four-weekend period.
Despite the dip, last weekend’s results are higher than the same weekend last year, where there were 726 listings, 660 auctions and 554 sales representing a clearance rate of 79%. Although total sales were higher at $550.3 million.
The most expensive property sold was a five bedroom home at 65 Barker Rd Strathfield for $3,005,000 by Ray White Burwood and the most affordable property sold was a three bedroom home at 70 Stella St Long Jetty for $385,000 by LJ Hooker The Entrance.
In Melbourne, the clearance rate was 74% from 843 auctions and 623 properties sold, whilst 220 were passed in, of which 116 were on a vendor’s bid, according to the REIV. Auction sales totalled $487.05 million.
In the previous weekend, the clearance rate was 70% from 825 auctions. In the same weekend last year, it was 74% from 931 auctions and in 2012, the clearance rate was 64% from 544 auctions.
At the same time, there were 422 private sales totalling $220.47 million.
REIV CEO Enzo Raimondo said last weekend was the first of three super Saturday weekends in October.
“Melbourne’s auction numbers for the September quarter of 2014 have set a new all-time record, with around 8,165 held in the past three months, which is 15% higher than the same time last year,” he added.
Raimondo expects the market will surpass the 4,300 auctions recorded in October 2013.
Wilson said Melbourne’s market tracked backwards for the second weekend in row as signs emerge of a waning in buyer activity.
“Melbourne recorded a weekend clearance rate of 73.8%, which was the lowest result reported for two months,” he said
Wilson observed that a falling trend is now developing.
“High auction numbers may be a factor in declining clearance rates… August and September have been record months for spring auction volumes in Melbourne with October set to continue the record monthly performances for this time of the year.
“The Melbourne spring market will peak over the pre-Melbourne Cup weekend with an all-time record of over 1,500 Saturday auctions due to be conducted in the metro area. Record numbers of auctions will are set to test buyer levels with signs of a creaking market already evident,” he continued.
The most expensive property reported sold was a five bedroom home at 73 Bowen St Camberwell for $3,600,000 by Bekdon Richards. The most affordable property sold was a one bedroom unit at 7/45 Oakleigh Rd Carnegie for $270,000 by Hocking Stuart.
Adelaide had 82 listings, 35 auctions and 24 sales totalling $11.5 million and Brisbane had 115 listings, 59 auctions and 27 sales totalling $14.5 million.
Meanwhile the Australian Bureau of Statistics’ latest figures show the total value of housing finance approvals fell by 1.2% in August, following a rise of 2.3% in July, but remain 16.7% higher than a year ago.
The total value of housing finance approvals to investors fell by 0.1% in August, following a rise of 1.3% in July, to be up by 27.6% in the past year. Investor borrowing for new construction rose by 23.9%, following a rise of more than 30% in July. Investor borrowing for construction is 47% higher than in August 2013.
Investors’ share of total new borrowing (excluding refinancing) rose from 49.2% in July to 49.7%. A year ago this share was 45.1%. This is a record high for this share, with the previous record of 49% being recorded in October 2003.
The total value of approvals for owner-occupiers fell by 2.0% in August after a rise of 0.2% in July. In the past year, the value of approvals has risen by 10.3%. The value of approvals for owner-occupiers excluding refinancing fell by 2.3%, to be up by 6.0% in the past year. The total number of approvals for owner-occupiers fell by 0.9% in August after a 0.3% rise in July. In the past year, the number of these approvals has increased by 4.4%. The trend series has been close to flat since the start of 2014 and is up by just 1.6% in the past year.
Approvals rose in four states and both territories. The largest increase was in Queensland (up 2.3%), followed by South Australia (up 0.8%).
Approvals fell by 2.5% in Western Australia and by 1.3% in New South Wales. In trend terms, approvals are growing rapidly in the Northern Territory and moderately in Victoria and Queensland. They are close to flat elsewhere, except in Western Australia, where they have been falling for three months. Relative to a year ago, approvals have risen everywhere except for the ACT, where they are down by 5.7%. The range of growth is from 1.0% in Victoria and 2.7% in Western Australia to 8.5% in Tasmania and 10.9% in Queensland.
Australian Property Journal
