Melbourne and Sydney auction clearance rates on Saturday recorded a preliminary rate of 76 per cent and 80 per cent respectively for Melbourne and Sydney property. The sales are similar to sale results documented during the five-year housing boom that peaked in mid-2017.
According to Domain Group, when the property market was in a downturn for Melbourne and Sydney this time last year, house sales were only 54 per cent in Melbourne and 49 per cent in Sydney.
The interest rate cuts in June and July of the Reserve Bank of Australia (RBA), leading to a 1 per cent interest rate, and the dismissal of the proposed negative gearing changes have given home buyers confidence in the property market.
“It’s the strongest bidding I’ve seen since the peak of the boom, and it wasn’t just Saturday, that’s been in the past two weeks,” auctioneer Damien Cooley said.
“Not every property is selling unbelievably well but when you see those clearance rates around 80 per cent and the number of registered bidders averaging almost six per auction that is starting to really fuel price rises.”
“I’d be very surprised in this quarter if we don’t see a significant rise in house prices.”
Property prices are on the rise with Melbourne and Sydney leading the growth. House prices for the top end market and smaller capital cities have been going up for the past three months.
Property analysts and economy experts are worried the real estate rebound may be too fast. Chief IFM Investors economist Alex Joiner said the weak economic growth for the June quarter could force RBA to cut interest rates further.
This might prove catastrophic with the current enthusiasm of buyers at property auctions.
Official data coming out this week is expected to show the weakest annual economic growth in the country since the financial crisis in 2009.
The RBA said it “continues to closely monitor developments in residential mortgage lending, the risks arising from the high level of household indebtedness, and credit conditions.”
“The CFR agencies stand ready to consider further measures in the future should circumstances change.”
So while the economy continues to soften, and the RBA under pressure to boost inflation and lower unemployment rate, the buyers, intent on taking advantage of the low-interest rates are back– as Melbourne and Sydney auction clearance rates show.
Melbourne and Sydney Auction Clearance Rates are Up
Weak economy or not, auction home buyers are back and clearance rates for Melbourne and Sydney property soared last weekend.
Melbourne initially recorded a clearance rate of 76 per cent and Sydney a rate of 80 per cent. These numbers could still change and go down as more results come through.
However, CoreLogic’s Melbourne and Sydney auction clearance rates results, which covers auctions scheduled throughout the week, were marginally lower in Sydney at 78.9 but the same in Melbourne at 76.1.
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