Weekend property market wrap: Melbourne leads strong results
October 27, 2009
Fears of a weaker auction performance last weekend have not been realised, with property buyers happy to snap up the increased supply.
Auction numbers have been relatively thin this year, particularly early in the year as caution reigned. However, last weekend was the biggest weekend of the year, with Melbourne again the strongest major market as pent-up demand - caused by the limited supply - saw buyers flock to auctions around the nation.
An 82% clearance rate from 882 auctions in the Victorian capital was a result that had even the optimists surprised. It represented a far cry from the same weekend last year when a clearance rate of just 50% was indicative of the worry creeping into the market.
Sydney also saw an increase in the number of auctions (to 355), although the clearance rate fell slightly to 61% from 64% the week prior.
The number of properties that went under the hammer in Brisbane was once again low, with just 28 auctions for the weekend. The clearance rate in the city fell to 36 per cent but the rate is subject to volatile swings due to the limited number of auctions.
Optimism
Clearance rates are a good sign of the health of the property market as they help gauge sentiment. If they are high it is indicative of buyers clamouring to get involved, while a low rate suggests buyer caution and/or overly optimistic real estate agents. Around 85% of the country’s auctions every weekend can be found in the two largest cities, with Brisbane third with 7% of Australia’s auctions - on average.
Mid-tier housing up for grabs
Currently, supply volume is largely in mid-tier and upper-tier as lower price homes were rushed onto the market before the halving of the Boost at the end of September. Now it is investors and upgraders with the opportunity to look at some stock after first home buyers dominated the first half of the year.
