Australian Property News
Auction clearances support strengthening market
Posted on Wednesday, February 13 2013 at 3:19 PM
Auction results from the first weekend of February this year should bolster optimism in some capital city markets.
Comparing numbers from the first weekend of February with those from the same time last year, both Sydney and Melbourne are showing signs of growing confidence.
In Sydney, auction numbers were almost triple with clearance rates at 74 per cent, which is 31 points higher than for the same time last year.
Andrew Wilson, a senior economist with Australian Property Monitors, says the results continue on from the strengthening sentiment telegraphed at the end of 2012.
“It’s a signal, early days, that the market is still building momentum from last year.”
Wilson notes that the clearance rate for Sydney’s inner west suburbs is the most impressive with 86 per cent of the 21 properties auctioned selling under the hammer.
“Certainly the strengths of last year are still apparent and that is the inner-west (suburbs) but no significant sign yet that the prestige market has started to gather in confidence,” he says.
Melbourne’s result was similarly impressive with more than twice the number of auctions and an increase of 25 percentage points to show a 64 per cent clearance rate compared to the same weekend last year.
Wilson says while Melbourne’s sentiment is similar to Sydney’s, the drivers are reversed.
“It had a strong prestige market which kept the whole market afloat last year and it looks like that’s continued in Melbourne last week”.
Brisbane’s numbers were mixed with almost twice as many auctions occurring compared to last year, however the clearance rate fell from 37 per cent to 27 per cent.
The auction culture in Brisbane is less established than in other capitals according to Wilson, however he believes that will change as the market improves.
“I think the auction culture will grow in Brisbane and I think it will eventually become a similar event to what happens in Sydney and Melbourne and it will base itself on when the cycle does start to lift and prices do start to rise again.”
Wilson predicts a good year ahead for Queensland’s capital city.
“There’s a lot of investor activity in Brisbane... The yields are very good and it’s actually quite a tight rental market.”
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