Auction clearances hold: no clear evidence of market slowdown, CoreLogic says

08 May 12:30 PM
Michael Bleby
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Falling volumes kept the auction clearance rate little changed around the 74 per cent mark in another week in which Melbourne performed more strongly than Sydney.

The preliminary national clearance rate of 74.6 per cent was a marginal rise on the previous week's 74 per cent, and was based on the results of 1365 auctions reported – out of a scheduled 1662 – marking a large drop from 2350 auctions a week earlier, CoreLogic figures released on Sunday showed.

The mixed picture of lower volumes and strong clearances gives little clarity whether the market is slowing – as Treasurer Scott Morrison told The Australian Financial Review apartments were doing last week, largely due to tighter credit restrictions for investors – because they come after a week marked by a faster-than-usual bounce-back from the slower Easter and Anzac Day holiday weekends.

"There is going to be an impact [of tighter credit], but whether what we've seen, particularly in the auction market, is clear proof that the hikes are having that effect, it's just a little too early to say at this stage," CoreLogic spokesman Kevin Brogan said.

The successful bidder for the 4 Wyong Street, Oatley, house purchased it for his adult son and family.

The successful bidder for the 4 Wyong Street, Oatley, house purchased it for his adult son and family. Supplied

 

"Sydney this week had a clearance rate of 77.8 per cent. That is not a clearance rate that points to a weakening auction market."

Demand for new apartments was strong at the weekend launch of Greenland and GH Australia's $1.6 billion Park Sydney project.

The sustained strength of the market in the NSW capital was also apparent on Saturday in Oatley, in the city's southern suburbs, where a five-bedroom family home at 4 Wyong Street sold for $2.76 million – more than 10 per cent above its $2.5 million reserve.

The buyer purchased the property for his adult son, who lived overseas, in duel with one other bidder that lifted the price of the eight-year-old house from $2.2 million well above the vendor's expectations, McGrath St George agent Kieran Bresnahan said.

"That was a very optimistic reserve," Mr Bresnahan said. "He would have taken less than that on the day if he had to."

In the north shore suburb of Crows Nest, a two-bedroom, one-bathroom apartment at 4/10 Emmett Street sold at auction for $1.36 million, $80,000 above the $1.28 million reserve price.

Preliminary auction results for week to 6 May, 2017.

Preliminary auction results for week to 6 May, 2017. CoreLogic

 

"This result reflects the continued demand for well presented, well renovated and centrally located apartments on the lower north shore," said agent Tom Scarpignato of Belle Property Neutral Bay.

Melbourne showed a preliminary clearance rate of 78.4 per cent, up slightly from last week's final clearance rate of 78.1 per cent. This week's preliminary figure was based on the results of 690 auctions – out of a scheduled 782 – which was also down from the previous week's 1226 auctions.

In the city's inner-eastern suburb of Armadale, a two-bedroom semi-detached house on 311 sq m at 22 Baldwin Avenue sold for $1,859,000, nearly double the $990,000 it last sold for in September 2007.

Adelaide and Brisbane posted higher weekly clearance rates than the previous week. Canberra was lower.

This semi-detached, two-bedroom house at 22 Baldwin Street, Armadale, VIC, sold at auction for $1,859,000.

This semi-detached, two-bedroom house at 22 Baldwin Street, Armadale, VIC, sold at auction for $1,859,000. Marshall White

 

Housing affordability is a key issue for Tuesday's federal budget and if the regulatory measures used to date – and strengthened last month – alone do not work, the government will come under more pressure to act.

CoreLogic's monthly figures for April last week suggested the market – particularly for apartments in the two largest cities - was pausing, but a day later rival data provider SQM Research published figures showing asking prices, a measure of the strength and direction of the market, were rising strongly.

The data provider on Sunday repeated the idea that Sydney was slowing.

"While clearance rates remain above the long-term average across the largest capital cities, the rolling four-week average reveals a softening trend which can be attributed to Sydney's final clearance rate drifting lower over the past two months while the trend in Melbourne is holding firmer," it said.



Read more: http://www.afr.com/real-estate/auction-clearances-hold-no-clear-evidence-of-market-slowdown-corelogic-says-20170507-gvznzo