Apartment sales plunge but auctions clearance rates still firm

Auction clearance rates around the country remained solid over the weekend, but a dramatic fall in sales has again highlighted the weakness in the property market. A new BIS Shrapnel report shows recently completed apartment complexes are staying empty as the new buildings fail to attract any buyers.

The figures from the report indicate around 16,623 apartments and townhouses have been abandoned or deferred in Sydney, Melbourne and Brisbane in the 12 months ending January 2009.

Construction companies are also feeling the pinch, with South Australian group Alpine Construction in charge of a $2 billion waterfront development placed in receivership yesterday. The group was struggling to sell the apartments, and even offered a free car or boat with any apartment purchase.

On Sydney’s North Shore it is estimated there are between 200 and 500 apartments unsold, including several unfinished properties. An $80 million apartment project on Sydney’s Wolseley Road is also in receivership.

Sydney’s Homebush West has played host to unsold apartments for over a year, while the Gold Coast has seen dozens of apartments worth millions remain uninhabited, including Michael Bezzina’s Jade complex, which is also in receivership.

Last weekend’s auction clearance rates provided some hope for those in the property game. Sydney recorded a 71% clearance rate over the weekend, with 123 properties selling at a total of $81 million, well up from last week’s 66%.

Melbourne also enjoyed an increase to 75% from last week’s 73%, but volumes were lower due to the Labour Day weekend with just 100 properties selling at a total of $45.77 million.

Brisbane experienced a 31% clearance rate, with just 10 properties sold. Adelaide also had a quiet weekend with just a 38% clearance rate, with properties sold totalling just $1.8 million.

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