While preliminary auction clearance rates fell over the weekend, the slowdown isn't necessarily an indicator of how the market is performing. Timing of the year, school holidays, and vendors holidaying overseas has significant effect on supply and demand.
The last week of June saw fewer homes taken to auction, with 1,669 auctions held across the combined capital cities, down from the 1,849 held over the week prior. The lower week-on-week volumes returned a slightly improved preliminary clearance rate of 56.7 per cent, contributing to a year-to-date average of 60.5 per cent for the first six months of 2018 based on preliminary figures.
A very different result to the first half of 2017, when an average of 72.5 per cent of homes were selling over the corresponding period.
The 2018 auction market so far has demonstrated the weakening property market, with the success rate of auctions continuing to fall through the first half of the year; returning the lowest weekly clearance rates seen since 2012 as property values decline in turn.
The unit market returned a preliminary clearance rate above 60 per cent this week, taking the average over the first six months of 2018 to 65.1 per cent; maintaining strength relative to the detached house market where an average of 59.5 per cent of houses cleared over the year-to-date, albeit houses account for a significantly higher proportion of overall activity.
Source: CoreLogic
Melbourne
There were 795 Melbourne homes taken to auction this week, returning a preliminary auction clearance rate of 60.3 per cent, increasing only slightly on last week’s final clearance rate of 59.9 per cent when a higher 941 auctions were held.
Craigieburn and Preston were the top performers with 12 and 10 auction sales last week, which recorded 64 per cent clearance rate from 597 auctions.
It also finished up the month of June with a new record on number of properties went into auctions with 3,433 homes – almost 100 more than previous record in 2017 (3,343).
“Craigieburn (12 auction sales) and Preston (10) were the top performers for the week," REIV CEO, Gil King, told WILLIAMS MEDIA.
77 Roberts Street, which sold for a reported $2.42m through Sam Rigopoulos of Jellis Craig Brunswick as featured on Luxury List. Image: Jellis Craig Brunswick.
“A new June record was set for the number of properties going to auction. This year’s figure of 3,433 homes surpassed the previous record, set last year. (3,343).”
“Houses in Moonee Ponds, Prahran Fitzroy North, Caulfield North and Albert Park fetched $2 million or more. One unit in Lygon Street, Brunswick East was also knocked down for $2 million, while at the other end of the scale, just further down the same street, an apartment sold for a more affordable $390,500," he told WILLIAMS MEDIA.
Sam Rigopoulos, an agent at Jellis Craig Brunswick, told WILLIAMS MEDIA the buyer pool in Melbourne has diminished because of the difficulty people are having raising loan finance.
"What tends to happen in these markets is they get bumpy with clearance rates, which cuts out passive sellers who only sell if the market is looking good. And as a result, stock starts to dry up," he said.
Sydney
Sydney’s preliminary clearance rate improved this week, with 56.4 per cent of auctions successful across a relatively steady volume of auctions week-on-week, with 631 held. Last week a similar 641 auctions took place returning a final auction clearance rate of 50.1 per cent.
"Unsurprisingly, agents are reporting that it’s the vendors who are prepared to meet the softening markets expectations in relation to price that are successfully selling," Leanne Pilkington, President of REINSW, told WILLIAMS MEDIA.
11 Moola Parade, which sold at auction for $2.265m through Brent Courtney of Mcgrath Mid North Side Lane Cove, as featured on Luxury List. Image: Mcgrath Mid North Side Lane Cove.
Ken Jacobs of Christie's International, told WILLIAMS MEDIA that a lack of stock combined with sellers holidaying at this time of year has significantly impacted auction numbers.
"Part of the reason sales are down is because the number of listings is down. That is the number one trend we're seeing. The winter effect has meant that we're seeing slower numbers. This time of year, the low supply is due to sellers who are away on holidays. Those at the higher end of the market are typically on holidays in the northern hemisphere for summer," he said.
Brisbane
While the overall clearance rate was low, sitting at 37.9 per cent, local agent Matt Lancashire of Ray White New Farm told WILLIAMS MEDIA this isn't necessarily an indication of how the market is performing.
"I would say the low clearance rates are simply due to timing of the year - school holidays are a major factor. There is actually more confidence in the market right now than we've seen in a very long time," he told WILLIAMS MEDIA.
9 Derby Street, Hendra that sold prior to auction through Marion Sheerman of Ray White New Farm, as featured on Luxury List. Image: Ray White New Farm.
"Interest rates are still low, and the press we've had in Queensland based upon how we are performing in comparison with southern states where clearance rates are lowering - we are not seeing that at all. We are actually seeing a bit of a slowdown because every second person I have spoken to is overseas in Europe at the moment, and I think that is a really good sign of the market - that people are actually spending money and going away.
"That is a pretty good factor of how the market is performing - if people are spending money, if they are confident, if they are going on great holidays (and I'll tell you right now that there are a lot of people away overseas at the moment)," he told WILLIAMS MEDIA.
"Our Ray White New Farm office sold four properties at auction over the weekend, with seven registered bidders, so we actually saw the opposite of the lower clearance rates across the rest of the city. But it really depends on where you go as well, the inner city always has a much higher demand," he said.
9 Derby Street, Hendra that sold prior to auction through Marion Sheerman of Ray White New Farm, as featured on Luxury List. Image: Ray White New Farm.
Meanwhile across the smaller auction markets, Canberra was the best performing in terms of clearance rate with 65.6 per cent of auctions successful, while only 25 per cent of auctions cleared across Perth.
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