The high clearance rates and double-digit house price growth being experienced in the property market is expected to moderate in the next few months, as experts say the market is unable to sustain momentum.
The final weekend of spring saw the highest number of property listings for the year to date, but clearance rates in Melbourne and Sydney were below the season’s strong average.
According to RP Data figures, 74.7% of houses sold over the weekend in Sydney, while Melbourne recorded a clearance rate of 69.2%.
There were more than 3400 homes up for grabs, with most of these located in Melbourne and Sydney.
Australian Property Monitors senior economist Andrew Wilson told SmartCompany it had been a record-breaking spring, but he doesn’t expect the momentum to be carried forward to 2014.
“We’ve had some extraordinary results throughout spring… it shows there has been a surge in sellers into the market to take advantage of the best-selling conditions in three to four years,” he says.
“I wouldn’t be surprised to see the clearance rates drop down a bit, as in the next few weeks there will be increased competition between sellers, so reserves might moderate a bit and there could be weaker price growth.”
In the last weeks of the year Sydney is expected to have around 1700 auctions and Melbourne will see up to 2700.
Wilson says people are making sure they settle before the end of the year when the market drops off until February.
“Clearance rates have flattened a little bit in recent weeks, but it’s been nothing dramatic in terms of decline… buyers have been spoilt for choice,” he says.
“While there is no real sign of creaking under the massive load, the tests do still remain. The question is, are there enough buyers to soak up properties at the rates we’ve seen this year? We should expect some moderation in clearance rates.”
While Sydney and Melbourne have performed strongly this year, the markets in Perth and Tasmania remain weak.
Over the weekend, 30.8% of houses sold in Tasmania, while 42.9% of homes in Perth were successfully shifted. In Brisbane homebuyers were deterred by heavy rain, seeing it record a clearance rate of 44.2%.
In Sydney and Melbourne, the current average time on the market for a house is 26 and 34 days respectively, according to RP Data.
Wilson says in 2014, high unemployment rates and broader economic concerns could hamper the property market.
“The economy is still mixed. Where the property market goes from the middle of next year will depend on where the economy goes,” he says.
“A lot of this year has been spent playing catch up and the Melbourne market is now just about back to where it was three years ago. We’ll have a solid start to the year, but Sydney can’t sustain the double figures prices growth of this year.”
According to APM, the most expensive property sold over the weekend was a four bedroom house in Port Melbourne which went for $5.175 million.
The cheapest property in Melbourne, a three bedroom unit in Seaford, sold for $247,000.
Across the year, the strongest performing Melbourne suburbs have been the outer and inner east, while in Sydney the inner west, south and north shore suburbs have done best.