Capital city auction report describes national softening

Capital city auction report describes national softening

Posted on Thursday, October 01 2015 at 9:06 AM

The Domain Australian Home Auction Report indicates an overall slowdown in home auction markets across the nation, with mixed prospects for the remainder of the spring sales season.

Dr Andrew Wilson, chief economist at Domain, says clearance
rates have fallen in most capitals due to a record numbers of early spring

All major capitals, except Adelaide, reported
decreases in clearance rates over the month.

“September home auction activity is now generally
tracking below last year’s September levels.”

Wilson says while clearance rates may be down, auction
prices have either risen or remained steady across the cities, reflecting the
seasonal effects of higher-priced auction sales.

“Record-high volumes of auctions will continue to test
capital city markets for the remainder of the year, providing greater
competition among sellers and more choice for buyers.

“This is likely to continue putting downward pressure
on clearance rates – particularly in Sydney, and to a lesser degree Melbourne.”



Sydney’s auction clearance rate is 69.8 per cent for September 2015,
down more than five per cent from the August result and well below the May 2015
record of 83.3 per cent.

Wilson says listing numbers are affecting Sydney auction clearances.

“September alone recorded a record average of 859
weekend auctions. This is well ahead of the August average of 738 weekend
auctions and the 590 conducted over September 2014.”

While the city’s median year-on-year auction price had
increased from $1.09 million to $1.151 million, the year-on-year price growth
rate comparisons have fallen solidly over the past four months.



Melbourne’s clearance rate fell only two per cent for the month to
record 73.2 per cent in September, which is more or less on par with last year.

Wilson says lower clearance rates in the Victorian capital
reflect the influence of a record surge in early spring listings.

“With a remarkable number of auctions – nearly 1,000
per weekend over the month of September – Melbourne’s auction market is well
ahead of where it was last year,” he says.

“The city averaged 977 auction listings every weekend
over September, up from the average of 830 over August and significantly higher
than the average of 640 over September last year.”

Melbourne’s median auction price increased 13.1 per
cent year-on-year to reach $820,000 in September.



The Queensland capital saw auction clearance rates
fall in September to 46.2 per cent from 57.4 per cent in August.

Wilson notes auctions have been gaining in popularity in
the city.

“Brisbane averaged 123 auctions per weekend over
September – a significant increase from the average of 106 auctions per
weekend in August.

“This was well ahead of the 99 averaged over September
last year.”

The city’s median auction price remained steady during
September at $700,000, just 1.1 per cent lower than at the same time last year.



Adelaide reversed the negative results from other
capitals, albeit marginally, seeing an auction clearance of 65.3 per cent for
September, which is 0.1 per cent higher than August.

Wilson says the city’s result reflects a steady
improvement in confidence for the South Australian capital.

“Not only was there an increase in Adelaide’s
clearance rates over September, but there was also a significant increase in
auction volumes.

“This reflects the growing confidence of sellers in the
local market conditions.”

Adelaide’s auction median of $597,000 for September
was 12.5 per cent higher than the August figure ­– a substantial gain.



After a strong August result, Canberra’s auction
clearance retracted 6.4 per cent in September to record a figure of 64.3 per
cent, well ahead of the 56.3 per cent from September 2014.

Wilson says the August 2015 figure of 70.7 was the
highest monthly result for more than five years, so the fall in September isn’t
as dramatic as it first appears.

“The underlying growth trend for the auction market
remains encouraging and indicates the consolidation of solid housing market
activity generally in Canberra this year.”

Canberra’s median auction price fell by a marginal
$10,000 to record $675,000 for September.


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