The Sydney and Melbourne property markets have sailed through their first big auction test at the weekend, as the start of spring saw a wave of properties hit the auction block.
More than 2000 homes went to auction last week, with an impressive 1179 of those properties selling under the hammer, according to RP Data.
The national clearance hit 72.2%, up from last week’s solid rate of 66.7%.
“If you wanted to script the lead up to spring, you couldn’t have written it better than what happened at the weekend,” RP Data Victorian housing market specialist Robert Larocca told SmartCompany.
Australia’s two biggest auction markets led the way, with Sydney scoring a remarkable 81.1% clearance on its 769 auctions.
“Exceeding the 80% mark is a clear indication of a very strong auction market,” says Larocca.
“Vendors selling their homes within the next two months will be very happy to see that.”
Larocca says Melbourne also stood up to the test this weekend after a flat few months during winter, with a clearance of 71% on 888 auctions.
“Melbourne has now had three weeks of clearance rates above 70%, that’s a good indication of the strength of the market,” he says.
Adelaide also had a strong 66.1% clearance off the back of 86 auctions, while Brisbane and Perth again struggled with a clearance rate of 47% and 46.2% respectively.
Larocca says the market is closely following last year’s progression at this stage and is still highly dependent on the Reserve Bank of Australia’s historically low interest rates, with any move by the RBA to raise rates potentially taking the heat out of the market.
But he says all current indicators show things are certainly warming up for spring.
“Those that are looking to buy in spring will find there is an increased choice, but many will find the bidding is much more competitive than two months ago,” says Larocca.