Winter auctions hit, but spring's in the air

Credit:The Australian
DESPITE signs of a strong start to spring property auctions in Sydney, the harbour city and Melbourne had a slower winter than last year.

Analysts say this was due to successive interest rate rises.

Australian Property Monitors data for June, July and August showed the number of auction listings rose by 40 per cent in Melbourne and Sydney during the past 12 months.

But the auction clearance rate in Sydney dropped by an average 6-8 percentage points compared with the same period last year, and by about 15 percentage points in Melbourne over that time.

"One of the biggest contributors has to be interest rates," APM's head of research Yvonne Chan said. "We've had six consecutive interest rate rises since October last year. And the median price for both capital cities has experienced a strong growth in the past 12 months.

"The level of stock is higher than previous years, so I don't think with spring now, and warmer times approaching, we'll see a big increase in the level of stock. And I expect the auction clearance rate probably to be travelling at about the same rate as now." Sydney cleared 69.5 per cent of homes on the weekend, up on 55.7 per cent the previous weekend and 65.9 per cent in the same week last year.

The most expensive home auctioned in the city, and the nation, was an eight-bedroom house in Point Piper in the eastern suburbs, which went for $17.3 million.

But in Melbourne the clearance rate came in at 61.2 per cent, more than 16 percentage points lower than the same weekend last year. It was also down on the 65.2 per cent recorded the previous weekend.

Harley Dale, chief economist at the Housing Industry Association, said it was unclear whether the formation of the new federal government had any impact.

"Sydney is probably an example of a market where there's probably still some price recovery occurring, and that's reflected in what appears to be a relatively good start to the spring season," Mr Dale said. "And I think Melbourne continues to be a relatively strong market, but just a market that isn't belting along the way it was 12 months ago."

Adelaide had a strong rise in auction clearance rates on the weekend, with 76.5 per cent of 29 listed properties selling, compared with 60 per cent last year..

Credit:The Australian