Strong clearance rates keep auction market warm through winter

The weekend’s hot clearance rates have kept the property market unseasonably warm for winter, particularly in the big auction cities of Sydney and Melbourne.

RP Data’s preliminary figures show Sydney with a clearance rate of 75.9% for 657 auctions, the highest in the city for 17 weeks.

Melbourne notched a 66.1% clearance rate with 722 homes going under the hammer, while Adelaide sat at a healthy 62.8% off the back of 68 auctions.

The median price for house in Sydney was $635,000, while it was just $100,000 less for a unit. Melbourne’s house/units medians were similarly close, at $478,000 and $420,000 respectively.

Brisbane’s auction market continued its lukewarm performance, with 44.2% of its 159 auctions sold on the auction block.

The national clearance rate dipped slightly to 67.3% from 69% last week.

RP Data’s senior research analyst Cameron Kusher told SmartCompany the results were strong for this time of year.

He said this was particularly evident in the number of auctions taking place throughout the traditionally quiet winter period.

“It shows that, particularly in Sydney and Melbourne, there is still a confidence in the market. People are still willing to sell their homes by auction,” says Kusher.

RP Data predicts auction volumes in August and September to be around 10-20% higher than last year.

While Kusher predicts similar market conditions for this spring as last year, he says the next few months will be the real test as buyers keep an eye on interest rates.

“It will be interesting to see how long the market can sustain this,” says Kusher. “At some point, the market will have to cool.”

Kusher says the growth phase has now been sustained for two years, traditionally the length of a property boom.