It has been a good period for those wanting to sell at an auction, with six weeks of clearance rates in the mid to high 70’s across Melbourne, Sydney, Canberra and Adelaide.
This week, the preliminary weighted clearance rate across the combined capital cities came in at 77.4%, compared to 77.2% last week, and 69.4% this time last year.
Weekly clearance rate, combined capital cities
Research house CoreLogic RP Data says Sydney’s demand “continues to outpace supply at auction,” with solid results of 84.7% this week, up from last week’s result of 83.9%.
Melbourne is also delivering the goods to sellers, with a preliminary clearance rate of 78.1% this week, which is right on par with last week’s 78%.
Capital city auction statistics (preliminary)
But how are prices fairing across the capitals?
For those sales made at private treaty, it’s no surprise prices are highest in Sydney – and by quite a margin – with a median house price of $835,000. That compares to Melbourne’s median house price of $545,000.
The difference between unit prices is smaller between Sydney and Melbourne – Sydney’s median unit price stands at $647,750, while Melbourne’s is $455,000. Across the combined capitals, the median house price stands at $622,658, while the median unit price is $531,103.
Rate stimulus – how long can it last?
CoreLogic RP Data’s Head of Research, Tim Lawless, says the property market seems to have responded almost immediately following the cash rate being cut from 2.50% to 2.25%, with flow on effects to mortgage lenders, but questions how long this stimulus will last.
Lawless says consumer confidence, economic growth, employment numbers, and political uncertainty are among the list of factors that could impinge on the stimulus we are currently experiencing in the property market.
Tougher lending conditions are also expected on the back of APRA’s vigilance on growth in lending to investors and warnings made by the RBA on the speculative nature of investors, particularly in the Sydney and Melbourne market.
“The wash up of all this is that the rate of capital gain is likely to continue to drift lower over 2015, even in the face of lower mortgage rates. We saw the rate of capital gain across our combined capital city index peak in April last year, at 11.5%. At the end of February, the rate of growth had moderated to 8.3%. If this scenario does play out, it will be a welcome trend for the Reserve Bank, which has become increasingly uncomfortable with the pace of house value appreciation,” says Lawless.
“Although there are concerns about the pace of growth in the capital city market, it is important to remember that it is largely Sydney and Melbourne where the bulk of growth is occurring.”
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