Bishwas Bhattarai, Senior Lending Manager
M. Comm. (Banking & Finance) UNSW, Dip. Fin. Plan.
We all have fallen in love with auction clearance rates over the years and has been talk for Monday morning. Auction clearance rate may not give the full picture but is one of the best ammunition tool that helps us to gauge the market with short time frame.
Firstly, not all property are listed on auction especially today only one is six to seven properties are listed on auction. Other properties and off the plan purchase form the part of the private treaty. This means majority of the properties listed are not even accounted for. Not to mention, once sold they do get accounted and recorded for the data does not get lost. So quarterly and monthly reports are more logical and accurate to predict and track the demand and supply in the market.
However, the properties that are listed generally have a good selling appeal either with its attribute or the location. Agents generally list those properties that likely will attract more buyer creating competition and bidding for higher prices. The auction clearance rate is more like a sampling data that screams the market behavior and gauge the buyers desire to own the property. And this has been very commercialized by the entry of two major online listing agent namely Domain and Resleste.com.au. Having the auction clearance rates over 70%, clearly shows bullish market and not to forget most of the passed on properties do sell later well.
It has been another busy week for home buyer this weekend. With over 2668 auctions stages around the capital cities with Melbourne leading the race with 1238 and Sydney 1043 according to Core logic date on Friday 26th May. The number of auction is very close what was for week before producing the two consecutive robust week.
As per the weekly result product by Domain Sydney finished up with 76% and Melbourne with 77% clearance rate compared to Realestate.com.au showing NSW with 77% and Victoria with 77% respectively.
In Sydney Drummoyne led the charge with 8 listing followed by both Blacktown and Lane cover each with 7 auction each. Whereas at South was different story with Pakeham leading the charge for 23 auction followed by Melbourne (CBD) for 21. All together Melbourne has over 50 suburbs with over 10 auction each with Carigburn , Frankston, Mornington and Tarneit all showing the great clearance rate.
It is a far cry from about the year ago, when the total number of staged up auction were over 1400 in both cities. Most of the region on NSW are showing the strong sign with the exception of the South West Sydney where the clearance rate has dropped to below 40% since last year. Clearance rate has increased in other Canberra and Tasmania as well, with Apple isle recently showing good growth signs. On contrary Adelaide, Perth and Queensland are struggling with low auction numbers and clearance rare.
Despite, all the road block and hurdles both Sydney and Melbourne market are showing the confidence on the market by buyer. Not to say there is also the sign of “far of missing out” and more jumping on the property bank wagon. And with given the buyers interest there are every possibility the number may be replicated next week followed by the strong clearance rate.