The auction clearance rate in Sydney over the weekend nearly hit 80%, as 200 properties were sold for a median value of $925,000. Preliminary data for Saturday 4 May (table below) shows a clearance rate of 78.1% for Sydney and 70.6% for Melbourne.
[1]Last week’s numbers were up slightly on the previous week’s clearance rate for Sydney, which was 73%. Adelaide and Brisbane still have weaker numbers but auctions are a less popular way of selling property in those markets.
[2]Across the board, auction activity continues to be stronger than last year and the past three months of improving numbers is indicative of a real improvement in residential housing. Data for last week shows a total value of over $500 million sold at auction in the major four states.
[3]On Saturday 5 May 2012 (above) a total value of $337.4 million was sold. The most expensive house sold at auction on the weekend in the four major metropolitan areas was a five-bedroom home in the beachside suburb of Tamarama in Sydney’s east and the most affordable was a three-bedroom unit sold in Burpengarry, nine kilometres south of Caboolture in Queensland.
Other housing data
Dwelling approval data also out last week, may not be as strong as auction rates, but economists say the slight slowing in the number of dwelling approvals for March – which fell by 5.5% after a 3% increase in February – is not something to get “overly concerned” with.
“The key is ensuring that there is enough new stock coming onto the market place to prevent an upward surge in prices. At present it does seem like demand for housing is matching supply and there is no cause for concern,” CBA economist Savanth Sebastian said in a briefing following the release of the data.
The real test will be whether or not the fall in March is a one-off and the numbers pick up in April. If demand keeps rising on the back of lower interest rates, but supply fails to keep up, there is the risk of a price blowout and ongoing affordability issues.
What the softer data in March does do, is potentially provide the Reserve Bank with another reason to lower rates. The market was pricing in a 52% chance of a rate cut at the RBA’s next meeting tomorrow, according to Credit Suisse’s monitoring of market implied interest rate pricing. That was down from 57% on Friday.
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