Property buyers remain confident, with the combined capital city clearance rate steady at 78.2% this week, compared to 78.6% last week. For 13 of the 15 weeks in which auction results have been reported this year, clearance rates have been at, or above, 74%.
National auction volumes came in at 2,385, down from last week’s 2,540. Over the same week last year, there were 1,535 auctions held and the clearance rate was 65%.
Weekly clearance rate, combined capital cities
Sydney’s stellar results continued this week, with a clearance of 88.7% recorded from 726 reported results, compared to last week’s clearance rate of 87.3%. At the same time last year, the clearance rate was substantially lower at 73.3% after 618 homes were taken to auction.
Blacktown, Ryde, and North Sydney are Sydney suburbs that experienced clearance rates of well over 90% this week.
Weekly clearance rate, Sydney
Auction volumes were also slightly down at 1,064, compared to last week’s 1,139. At the same time last year, just 710 auctions were held and a clearance rate of 61.9% was recorded.
The Melbourne regions with the highest clearance rates this week included the South East and Outer East, where, according to preliminary auction results, 9 in every 10 homes went under the gavel.
Weekly clearance rate, Melbourne
For those of you looking to buy at the moment, property guru Margaret Lomas suggests you beware of the lure of positive cash flows in property, if that’s the only factor pulling you in to the purchase.
Lomas gives the example of single industry towns to illustrate why it can be risky to buy for cash flow alone.
“It doesn’t take much to reverse the fortunes of those who invested – a change in the industry, an economic downturn, and a fluctuating Aussie dollar are just a few of the many influences which can take a whole industry and wipe it out in a matter of months,” she says.
“Rents fall dramatically within weeks and the great returns turn into dismal yields.”
Therefore, while cash flow is an important aspect, it pays to look for an area with a diverse industry base, a growing population and “a high degree of public amenity.”