Auction Clearance Rates: Going, Going, Down

Auction clearance rates are still well-down despite a glimmer of hope in some of the east coast cities. Clearance rates in Melbourne and Sydney improved over the weekend with Sydney reporting a clearance rate of 44.7%, up from the previous weekend’s 41.7%. Melbourne’s figures were 48.1% compared to 41.7% the previous week.

Victorian Terrace, Perth

Perth, in contrast reported a dismal 17% clearance rate, compared to September’s average rate of 40%. In fact Australian Property Monitor’s senior economist Liam O’Hara reports that:

“Its got to the extent where there’s just not anything there. The dollar value for properties sold has gone down from $10.4 million to $5.9 million in October.

Rates in Brisbane and Adelaide were 22.9% and 29.4% respectively which makes our Oct 27 report on auction clearance rates positively glowing in comparison.

In Sydney the monthly clearance rate was 56%, only 1 point lower than September’s, but 14 points lower than the same figure a year ago. Upmarket Sydney agent John McGrath had 90 weekend auctions and sold 52% of the properties.

According to Mr McGrath the story of the Sydney meet over the last few weeks has been strength in the $400,000 - $500,000 range - reflecting renewed interest by first home buyers. However McGrath points out:

“that the $1.5 million -$3 million market is clearly suffering because of the state of the share market. Margin loans and reduced bonuses have clearly had a big effect”

An auction for a 1915 Federation cottage in Lane Cove attracted a crowd of 80 to 100 people and is expected to sell in the next day. In other word’s regardless of the market there is always demand for unique, well-located property.

Agents agree that the Sydney property market would stay at existing levels of demand until Christmas - after that “the property market would be at the mercy of the economy.” Really, what a surprise!

Photo Credit Australia News