Economy

Election fails to hammer property sales as Melbourne reaches highest auction levels in three years

Yolanda Redrup /

It’s been another stellar weekend for Australia’s property market, with Sydney tracking at record-breaking levels and Melbourne reaching three-year highs – despite the ongoing political mayhem.

Clearance rates in Sydney hit 83.8% on Saturday, according to Australian Property Monitors.

Down south, Real Estate Institute of Victoria figures revealed 76% out of the 548 properties up for grabs in Melbourne sold.

APM senior economist Andrew Wilson told SmartCompany Sydney’s clearance rates have exceeded 80% for five weeks now.

“There is a sameness in the political environment at the moment, but this isn’t impacting the housing market,” he says.

“We’re now getting to the all-time highs which were last seen in the early 2000s and late 90s. We’re about to go over those levels, although the current strength needs to be maintained for another month or so.

“Once the housing market gets some sense of momentum and enthusiasm, unless something else is very strong, other factors tend to be overlooked.”

While other sectors of the economy are being impacted by poor consumer confidence and low amounts of discretionary spending, the property sector has broadly recovered from its lows of the past three years.

Wilson says while Melbourne has been tracking lower than Sydney this year, it too is in recovery, and is slowly moving from a “solid” to a “strong” performance.

“Melbourne has been tracking around mid to high 60s, but now it’s moving into the 70s.

“There is some energy growing in the Melbourne market as well and it’s starting to step up a gear into the next level, so signs are positive for Melbourne as well,” he says.

REIV figures show the property market’s strongest performance in the past five years was in June 2009, when clearance rates averaged 87%.

This dropped significantly between 2010 and 2011 and by December 2011, the average monthly clearance rate had fallen to just 54%.

The strength in the Sydney market started improving last year when the New South Wales state government increased the first home buyers’ grant.

But sales aren’t just increasing – the number of listings are on the up as well.

APM figures for Sydney show in the first two weeks of August the number of houses listed is up 32% from this time last year, while in Melbourne listings are up 25%.

“This shows there is both seller and buyer confidence,” says Wilson.

“It’s still not into the very big numbers that you get into spring, where in Melbourne upwards of 1000 houses will be listed for a weekend. That’s when the market will be fully tested,” Wilson says.

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