Australia has hit its highest national clearance rate in six years, according to research house CoreLogic RP Data.
The preliminary clearance rate came in at 78.3% this week across the combined capital cities, which is a solid lift on last week’s 74.5% and the 70.8% this time last year.
Weekly clearance rate, combined capital cities
CoreLogic RP Data housing market specialist, Robert Larocca, says the national clearance rate hasn’t been this high since September 2009, when it came in at 79.7%.
Larocca says it’s likely this improved demand – particularly since 2014 – was helped by the recent interest rate cut, from 2.50% to 2.25%.
Sydney’s preliminary clearance rate was 85.1% this week, compared to 84.2% last week and 79.8% this time last year, making it the strongest performing auction market nationally.
The nation’s other strong property performer – Melbourne – delivered a preliminary clearance rate of 77.8%, compared to 75% last week and 67% this time last year. This week’s result was the highest Melbourne has seen in a year and a half.
Capital city auction statistics (preliminary)
Foreign investment
In other property news, chairman and owner of Century 21 Australasia, Charles Tarbey, says that the Government’s recent proposal to hike fees and impose heavier fines on foreign investment is “not the answer to the question of housing affordability” for a few key reasons.
The first is that foreign investors take up a small portion of the property market in Australia – only around 3% of the value of dwelling turnover in Australia over the last decade – according to the RBA.
Secondly, the portion of the market that foreign investors occupy is only new dwellings, off the plan developments, and properties within the CBDs of capital cities, which makes their investment preferences quite expensive. This suggests foreign investors are probably not impinging on the first home buyer’s market.
And thirdly, Tarbey suggests that looking to housing supply and planning would be a more effective strategy for increasing affordability in the national property market.
“There has been much discussion regarding whether there is currently a shortage of housing supply, and I would generally agree that this may be the case. It is fairly well known that the planning and approval phase of developments can sometimes be lengthy. If this was to be reduced, however, and if new land was to be opened up for development, I believe the housing shortage could begin to be addressed.”
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