And Now The Up Swing Begins – Maybe?

Well it finally came, the perfect storm for Sydney’s property auctions. A drop of 1% in the cash rate last week, the drop of some 30% of some property’s asking prices, and maybe the promise of $1000’s of dollars to tax payers in the government’s stimulus package, plus the first home owner’s grant has finally giving the dead property market a shove.

In Sydney this weekend’s property auction clearance rates were 71%  – a full 21% better than the weekend before and 15% better than a year earlier.

One weekend does not a trend make though. The weekend was extraordinary in other ways too 60% of Queensland is now a flood-effected disaster zone and Victoria’s bush fires have killed at least 130 people, making them Australia’s worst natural disaster ever.

Rather unsurprisingly in Melbourne, on a day where the temperature hit 48C and people were urged to stay in doors and avoid unnecessary travel, only 79 properties went to auction, compared to 327 the previous weekend. The clearance was a low 43%, down 20% from the previous weekend. In Australia auctions are normally conducted at the front of the property in question – standing around in 48C really is a death-defying act – you have to wonder about the motivation fo the agents who insisted on continuing with their planned auctions.

Adelaide had almost as high temperatures as Melbourne, and had had them all week as well. Their clearance rates at 42% was only down 7% for the previous week. Brisbane had a similar story with a clearance rate of 31% down 12% from the previous week.

It does seem that Sydney’s western suburbs may finally have house prices back in line with rental returns. A near-new three-bedroom home in St Helens, in the SW of Sydneysold for $290,000, $10k less than the owner paid 6 years ago. The property should rent for $300/week- which makes it around the historic average for standalone home of a gross rental yield of 5%, after tax breaks and depreciation you can make money on that as an investor, almost.

Bondi Beach, Sydney - the only place to be in 40C or higher!

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