Home sellers rush to market
Monday, February 25, 2008/
The looming spectre of more interest rate rises meant a large number of home sellers were disappointed last weekend, after high listing rates were met with moderate auction clearance rates in several metropolitan markets.
In Brisbane there has been a 62% increase in property listings over the past month, including 61 properties put on the block last weekend, Australian Property Monitors found. But only just over half of those properties were sold – the clearance rate of 59% almost 10% below the same period last year.
Melbourne saw a similar phenomenon, if on a much bigger scale. According to the Real Estate Institute of Victoria, almost 1000 auctions took place in the city last weekend, up from 622 the weekend before and 826 in the corresponding week last year.
But the clearance rate of 73%, although relatively strong, was far from the 82% rate achieved in the same period last year.
RP Data residential research director Tim Lawless says higher interest rates and international economic wobbles were pushing home owners to try and get their homes on to the market before prices drop.
“Last year was an absolutely stellar run in terms of property value growth in Brisbane and Melbourne, and many potential vendors are now likely to be picking the market cycle as peaking,” Lawless says.
And, he says, the mismatch between listings and clearances is likely to get worse in the months ahead.
“With another interest rate rise virtually guaranteed next month, and potentially another rise to come during the year, it is likely that clearance rates will fall as confidence in the market abates and affordability constraints make it harder for first home buyers and low income families to enter the market,” Lawless says.
In Sydney, 254 of 406 properties on the block sold, a 57% clearance rate, a figure that reflects the contrast between continuing strong demand in the city’s exclusive eastern suburbs and continuing relatively weak conditions in the west.
Strong economic conditions in South Australia resulted in a 71% clearance rate for Adelaide, with 35 of 48 properties selling.