Auction sales going gangbusters

Apartment sales nationwide are at their highest level since the 2009/2010 financial year, and house sales are enjoying their highest level since the 2007/2008 financial year, based on current estimates.

During the 2013/2014 financial year some 348,670 houses were sold, an increase of 10.4 per cent when compared to the same period last year. Unit sales increased 8.6 per cent, with 135,330 apartments being sold.

Sales of both houses and units fell in the Northern Territory and Western Australia, with Queensland and Tasmania recording huge spikes with sales up 14.8 per cent and 21.3 per cent respectively.

RP Data senior research analyst Cameron Kusher said considering the significant number of unit developments taking place at the moment it is reasonable to expect an "upwards revision" to the unit number over the next few years.

Mr Kusher added a larger rise in home transactions was found across the combined capital cities than nationally, adding higher transactions are more important for market participants than higher values.

“More sales means more commission for agents and brokers, more lending for banks and more business for valuers,” Mr Kusher said.

“The combination of higher home values and greater sales is a boon for state and local governments. Stamp duty, which is levied on property transactions, increases as more transactions occur but also as values rise because stamp duty is typically calculated on a sliding scale.

 “Sydney and Melbourne sales volumes appear to have already peaked, although they may rebound once more during spring. Overall we would expect a reasonably high number of sales this financial year, but final numbers may be slightly lower than in 2013/2014.”

Mr Kusher expects interest rates to remain on hold to the end of this year. However, they have the potential to rise during 2015.

Sydneysiders are taking full advantage of the stable economy and current interest rate level, with the volume of auctions taking place during spring double the auction level when compared to the same period in 2013.

Director of Auction Services and Real Estate Business blogger Rocky Bartolotto said sellers are preferring auctions given the lower stock levels and buyer numbers across Sydney.

“The last two weekends in September are set to be very strong auction weekends,” Mr Bartolotto said.

“The lower auction numbers we are used to seeing on weekends is certainly not reflected this year, with the volume of auctions we have booked up 70 per cent.”

 

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