A leading real estate industry analyst has expressed concern that the property market isn’t performing as well as hoped, with clearance rates and listings still down on last year’s results and most buying activity centred around the middle and lower-market segments.
In Sydney, the city recorded a clearance rate of 55.3%, while in Melbourne the rate was 62%, although that rose from 61% last week.
SQM Research managing director Louis Christopher says these results are discouraging, pointing to results in Sydney where clearance rates have remained relatively steady, but the number of listings has fallen.
“The clearance rates we’re recording at this time of year, in the previous weekend and the weekend before, they’re lower than we were recording last year. That’s not good,” he says.
“And during that time, we were experiencing falling house prices. It’s a sign the market is still very weak and we’re not seeing any major recovery at all.”
However, there is some sales activity being recorded. Melbourne had a clearance rate of 62%, up from 61% last week but down from the 64% recorded during this weekend last year.
There were 797 listings – although last year there were 939. And, in Sydney, clearance rates fell from 56% last year to 55.3%, while listings also fell from 497 to 391.
Christopher says most of the activity is being recorded in the lower-to-mid range property areas, although it’s difficult to monitor such sales as these aren’t typically sold at auction.
“We’re seeing activity still in the middle area, and the lower area. They’re doing better due to the fact they’re more affordable.”
“It’s the upper and prestige markets that are hurting. And that’s a market that tends to make up more of the auctions.”
The poor number of listings is a clear sign that the upper end of the market isn’t doing very well. Christopher says, in a better year, that number would be higher.
“We are seeing slightly higher clearance rates than the end of last year, but that’s because of seasonal adjustments. Right now, we should be seeing many more listings than we are right now.”
Although the REIV said in a statement the weekend’s results are a sign the market is doing better, saying the results “indicate that the improved demand recorded last weekend has been sustained and that will help improve confidence over autumn and into winter”.
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But Christopher isn’t so positive.
“If we’re going to use these measurements as our basis, I’m going to be a little bit more negative about the market right now.”