Pockets of property market bounce on rate cut, but sluggish auction conditions continue

Pockets of the property market have performed well this weekend but overall auction clearance rates have dipped into the worst levels in several years.

The weekend saw an increase in the number of properties on the market as sellers hoped to get rid of properties before the Christmas break – but a lack of sales means there will be a glut of homes on the market early next year when the market returns in full force.

Australian Property Monitors economist Andrew Wilson says elements of some markets are doing well.

“In Sydney you do see some more activity in the $700,000-$800,000 price range in the inner south-west regions, but that’s also the squeeze you get from normal affordability issues.”

“They represent pretty good value now, and overall there is still some bargain hunting in the prestige markets.”

Wilson says homes in high-end suburbs are selling well due to prices moving from a low base.

“They’ve been oversold, and there is some good buying for prestige in quality locations – we’re seeing that in Melbourne in the inner-east.”

Wilson says clearance rates in some inner-east areas in Melbourne have reached over the 70% market. However, he says, the mid-market remains quiet.

“Overall, it’s just been a flat result. Buyers have just shifted their focus are waiting for next year.”

According to the Real Estate Institute of Victoria, there were 803 auctions reported – a steep increase as buyers hope to make a sale before Christmas time. Only 55% sold.

“There is only one more normal weekend of auctions this year and it appears that the overall clearance rate in 2011 will be 56%,” says REIV chief executive Enzo Raimondo – representative of a lacklustre year.

Next week will see 615 auctions as the last major week of sales before Christmas. The market is set to resume in full force in February.

In Sydney, the city recorded a clearance rate of just 50.5%, while Adelaide and Brisbane recorded rates of 31.6% and 19% respectively.