National clearance rate lifts as spring market expected to still bloom
Monday, August 4, 2014/
The property clearance rate crept higher again across capital cities this weekend, as experts shrug off suggestions the spring market will not reach full bloom this year.
The national clearance rate has remained unseasonably strong for winter, rising to 69.7% off the back of 1467 auctions this weekend, up from 67.3% last week, according to RP Data.
Property analyst Louis Christopher, from SQM Research, told SmartCompany he didn’t put stock in predictions the spring market may be smaller than usual.
Christopher says there will be just as many buyers around, but the number of listings should swell.
“Clearance rates will fall and commentators will say there has been a slow down,” says Christopher.
He says comments pointing to a price growth “slow down” are inaccurate, and it is more likely the market was just experiencing a natural seasonal lull.
“The market has still got a lot of momentum,” he says, pointing to a tempo of a 7% rise in national property prices. That tempo has hit 15% in Sydney, according to Christopher.
RP Data spokesman Robert Larocca agrees there is no evidence of a slowdown, telling SmartCompany this morning all indications show spring volumes will be larger in volume than a year ago.
At the weekend, Sydney’s auction market again performed outstandingly, with a clearance of 77.6% as 583 properties went under the hammer.
Melbourne cleared 70.9% of its 637 auctions.
Larocca says the weekend’s results were a good sign for the Melbourne market, which has been playing second fiddle to Sydney’s auction strength.
“Last week Melbourne dragged the national clearance rate down, but this week it contributed substantially, and that bodes well for those in Melbourne,” says Larocca.
Adelaide had a clearance of 60.3% on 94 auctions, while Brisbane preformed woefully, with a 32.3% clearance on 96 properties.
A review of volumes nationally over the first eight months of the year shows there have been nearly 50,833 capital city auctions in total, or 38% more auctions held when compared to the same period last year, according to RP Data.
Christopher shrugged off commentators saying buyers are showing signs of resistance to higher prices at the end of an 18-month upturn.
“They were saying that two years ago. Buyers will always be unhappy about prices,” he says.
Christopher predicts spring listings will be strong but says it will be interesting to compare the numbers to that of last year’s strong season.
Larocca says the growth is more moderate than levels associated with the 2007 and 2010 cycles.
“I remember in 2010 and 2007, buyers were complaining about prices rising in front of their eyes. They are less likely to be surpassed by rising prices now [than back then],” he says.