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Stats & Data

Summer Is Over But Things Are Still Hot

Date: 17/03/2015

Released March 17 2015

Auction clearance rates for Sydney and Melbourne remain strong and there are signs of price growth in the market. Brisbane is sending mixed messages to the market and to investors.

The Stat

Auction clearance rates report the number of properties sold compared to the number of properties offered up for auction. A figure of 80% and above indicates a strong performance. The real estate industry aims for 70%.

The Numbers

 Auction Clearance Rates

This Week

Last week

Clearance Rate

Auctions

Clearance Rate

Auctions

Change

Sydney

85.1%

684

84.3%

857

0.8%

Melbourne

77.8%

1072

75.0%

352

2.8%

Brisbane

57.1%

63

37.2%

129

19.9%

Adelaide

72.9%

48

60.7%

61

12.2%

Perth

41.7%

24

33.3%

33

8.4%

Tasmania

71.4%

7

50.0%

10

21.4%

Canberra

73.3%

30

70.8%

72

2.5%

Source – CorelogicRPData

The Analysis

Sydney and Melbourne have bested their performances from last week and have driven overall clearance rates to a six year high. This ongoing result is feeding into housing prices. Strong auction results have seen sales up to $1million above reserve in Melbourne! Brisbane showed a significant jump in its clearance rate but that was on the back of a significant drop in supply.

What It Means for Investors

Autumn is a time of preparation for the winter hibernation for some animal species. For them, the season is characterised by a flurry of activity. The real estate market is kind of like that too. Sellers prefer to have their property transactions completed by winter and this leads to an active time on the real estate market. Results in Sydney and Melbourne fit this pattern. The good news is that clearance rates are remaining high even with the increased seasonal supply to the market. This shows that demand is strong and that property prices are underpinned by strong market fundamentals.

The Brisbane market however is still one to be wary of. Clearance rates did show a strong improvement that had some real estate insider’s spruiking the market. However, this result was on the back of a drop in supply by half. When you add in the inherent political instability of a new minority state government, and a drop in both consumer and business confidence, there are good reasons to wait and see where things are headed.

Profile photo of Andrew Stow

By Andrew Stow

Andrew undertakes residential property developments and has been a moderator for propertyinvesting.com for five years. Andrew’s business background is in outsourced customer service where he was a statistical analyst and workforce planner servicing programmes for top 100 companies.

Comments

  1. Profile photo of Benny

    Hi Andrew,
    “The Brisbane market however is still one to be wary of. Clearance rates did show a strong improvement that had some real estate insider’s spruiking the market. However, this result was on the back of a drop in supply by half.”

    Add to that, Brisbane has never (to my knowledge) had a penchant for auctions. Certainly, auctions are far from “the norm” up here.

    Syd and Mel on the other hand seem to relish auctions, and it seems their auction figures might be a reliable indicator of the overall health of the RE industry. In Bne though, I believe auctions are an “also ran” rather than a leading indicator.

    Do others see the same as me?

    Benny

    • Profile photo of Andrew Stow

      Some interesting local insights there Benny. You make a good point. And I agree that no single metric tells the story equally well across the board. I think the important thing to do is start building a picture of what is going on.

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