Steady as she goes for property

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Auction clearance rates fell slightly this week, but demand is still strong, with a preliminary result of 76.4% recorded across the combined capital cities, compared to 78.2% last week.

The number of properties taken to auction fell to 2,127 from last week’s 2,426. That compared to the 2,194 properties auctioned the same time last year.

Weekly clearance rate, combined capital cities

20150518 - weekly clearance rateWhile auction volumes remain comparable to last year, clearance rates are clearly up over the past 12 months, with a near 10 percentage point rise nationally (see below).

Capital city auction statistics (preliminary)

20150518 - capital cityThis week, Australia’s strongest property performer – Sydney – continued to deliver with a clearance rate of 85.5% and is showing no sign of slowing down.

The best performing regions in Sydney this week were the North Sydney and Hornsby region (with a clearance rate of 94.1%) while Ryde, Parramatta and the Inner South West all had clearance rates over 90%.

The Melbourne market also delivered solid results this week, with a clearance rate of 74.3% compared to 79.0% last week. The best performing region was the Inner East, with a clearance rate of 81.9%.

The median price for a house across the combined capital cities currently stands at $615,518, with Sydney at the upper end of the spectrum at $837,000. You’ll find a house cheapest in Hobart, where the median prices stands at $340,000.

Capital city private treaty median prices

20150518 - auctionsChairman and owner of Century 21 Australasia, Charles Tarbey, says that over the growth cycle starting in June 2012, there has been a 24.3% increase in dwellings on average, with Sydney and Melbourne driving the majority of the growth.

Tarbey says low rates are contributing to the impressive sale prices in some areas.

And if you’re looking at buying a property in these market conditions, Tarbey has the following note of caution.

“It seems to me that stable growth is preferable to growth that is fuelled by low interest rates, low stock levels and high levels of buyer activity. With that in mind, I believe that it would be wise for buyers to carefully consider their next move. With interest rates so low, the Reserve Bank of Australia is running out of room to move them too much lower. Eventually interest rates will have to come up again. Buyers must ensure that they have room in their budget when this happens.”

Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regards to your circumstances.

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