The property market ramped up last week, as auction activity starts to get in the swing of things for 2015 after the Christmas slowdown.
The preliminary weighted auction clearance rate for the capital cities lifted to 66.9% from 61.6% on the weekend, according to research house RP data. The result compares well with the 2014 market, which recorded an overall clearance rate of 68.2% at the same time last year.
In total, there were 954 auctions in capital city markets over the weekend, which was well and truly higher than the 403 scheduled for last week.
Weekly clearance rate, combined capital cities
In Sydney, the clearance rate was recorded at 80.5%, and in Melbourne it was 61.4%. In Melbourne, of the 197 auctions captured by RP data, 121 were cleared.
Capital city auction statistics (preliminary)
According to RP Data housing market specialist Robert Larocca, the impact of the recent RBA rate cut won’t be felt by the market on a national scale for a few weeks because auction volumes are still relatively low.
“If the rate cut is to encourage a few more active buyers and sellers it will also take a few weeks to be obvious.”
Charles Tarbey of Century 21 Australasia and NZ also shared his thoughts on the interest rate cut in his article on Switzer Home Loans, and says it’s “highly beneficial” to take a long-term attitude.
“By keeping your eyes to the horizon, and remembering that economic peaks and troughs are inevitable, I believe a prudent property owner can face any market condition that arises. This might be achieved by locking in a low interest rate, or taking the opportunity to build financial buffers, or ensuring people are placing themselves in the best possible position to face the more difficult times, should they eventuate.”
He says domestic property owners could build up their financial buffers by using extra savings from the interest rate cut to make additional payments on a mortgage, or to supplement savings for a deposit, which could be used on another investment property.
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