Analysts are growing more confident of a sustained recovery in the property market following yet another strong weekend of auction clearance rates, with over two-thirds of residential properties selling at auction in Melbourne and Sydney.
However, some warn the market will need to keep its momentum after the Easter break later this month.
The Real Estate Institute of Victoria reported 69% of the 884 properties on the market sold, down from 72% last week, but up 8% from this time last year.
Get business news first
Sign up to SmartCompany’s daily newsletter
In Sydney, the number of properties for sale was increasing, with 22% more properties listed than in the corresponding period last year. There were 455 auctions in Sydney, compared to 374 this time last year, according to Australian Property Monitors’ figures.
The clearance rate was at 69.3% for the 455 properties auctioned. Last week, 74.2% of properties sold, Australian Property Monitors reported.
AMP senior economist Andrew Wilson told SmartCompany it was a “solid result” for the Sydney and Melbourne markets.
“Although the clearance numbers are down a bit on last week, they are still significantly higher than a year ago. Melbourne listing numbers are also down slightly, but some very high numbers are coming through in the next few weeks with Labour Day and Easter holidays coming up, numbers in the 1100-1200 range,” he says.
Wilson was enthusiastic about Sydney’s jump in residential property listings, but says the Sydney market has always been weaker than Melbourne’s.
“Both markets are operating at levels closer to numbers of the boom period in 2010. Confidence builds its own momentum and it’s off and running, but the full picture will be revealed come Easter,” he says.
Wilson says while it’s still early days, there is a momentum building fuelled by renewed confidence.
“While it’s still perhaps early days, with three full weeks of auction activity there is a sense of momentum building in the market and there is a consistency about the numbers,” he says.
“Both Melbourne and Sydney are moving in the one direction, indicating there is an underlying driving force. Low interest rates are generally fuelling both housing markets.
SQM managing director Louis Christopher says increasing market confidence is influenced by global factors.
“The positive housing market is driven by very low interest rates and renewed confidence in the local and domestic economy, created by the rise in stock markets and banks around the world,” he says.
Notable auctions over the weekend included the sale of fashion designer Alannah Hill’s Toorak Road home in Melbourne, which sold at auction for $4.365 million.
The most expensive house sold in Melbourne over the weekend was located on Domain Street, South Yarra and went for $6,450,000, according to the REIV.
Christopher says the results should not be taken as gospel as there are still a number of unreported auctions, but the positive results suggest a modest recovery in the market.
“2013 is looking increasingly positive and optimistic. We are quite positive and confident we will see real estate price increases throughout the course of the year, varied by city and locations but positive overall and we don’t see the election influencing on the direction of the housing market,” he says.