For the past five weeks, auction clearance rates in Sydney have exceeded 80%, a further sign that strong growth in the city’s housing prices is set to continue into 2014.
Although some surveys indicated prices in Melbourne were flat last month, elevated clearance rates in the city led analysts to describe the market as solid.
Despite a general consensus among economists that the Reserve Bank board will keep official rates on hold tomorrow, the outlook for property prices in both cities remains bullish as home buyers are likely to benefit from improved borrowing conditions as financial institutions compete to attract lenders.
Sydney still booming
In Sydney 82.7% of properties that went to auction were sold, the fifth week in a row that the figure has exceeded 80%. Over the month of February, 1490 homes were sold at auction, the best monthly results for February on record.
The average price for houses sold by auction in Sydney was $1.08 million, up from $989,000 for the same weekend last year. For Sydney units, the average median price was $681,005, up from $637,500 last year.
Auction listings also remained strong, with this weekend’s offering of 671 properties well ahead of last year’s 455 over the same weekend.
Australian Property Monitors senior economist Andrew Wilson noted in a report that “February’s record breaking Sydney weekend auction market has unsurprisingly continued into March with no sign of a let up in buyer or seller enthusiasm.”
Melbourne solid despite February flat spot
Despite monthly data from the RP Data-Rismark Home Value Index showing that prices actually fell by 0.19% in Melbourne in February when compared to the previous month, clearance data for the month points to a strengthening in the home auction market.
Wilson told SmartCompany Melbourne’s property market was “solid rather than strong.”
“Buyer and seller confidence in Melbourne’s auction market remains solid with no sign of a waning in activity despite ongoing concerns over the performance of the local economy”.
In Melbourne, the average median house price was $810,000, up from $730,00 for the same weekend in 2013, while the average price for units sold at auctions was $550,000, up from $495,500 last year.
The clearance rate for auctions in the metropolitan region on Saturday was 76.1%, well ahead of the 65.8% clearance rate registered over the same weekend in 2013 and also about the weekend average of 75.2% for the month.
As in previous years, the number of properties going to auction was bolstered by an expected pause in the market next week due to the Labour Day holiday. A total of 1102 properties were listed to be sold at auction last weekend, about the same as the 1139 that went under the hammer the previous week and well ahead of the 882 auctions that took place during the same weekend last year.
The most expensive auction in Sydney over the weekend was a five-bedroom house in Coogee which sold for more than $4.3 million. At the other end of the property market, a two-bedroom unit in Bankstown went for $377,500.