Sydney, Melbourne clearance rate falls

Record-level auction listings are providing Sydney buyers with unprecedented choice, with November set to smash the all-time record for auctions conducted over a month. High auction numbers will test a market that has produced 80 per cent clearance rates through most of spring.

High auction numbers over the past month, however, may be impacting the local market, with three out of the last five weekends below the 80 per cent benchmark. The four-weekend average clearance rate now stands at 79.5 per cent compared to 82 per cent over the previous four-weekend period. This is the first time this spring the four-weekend average has dipped below 80 per cent.

A total of 943 homes were listed to go under the hammer at the weekend, which was well ahead of the 883 conducted last weekend and the 802 auctions listed over the same weekend a year ago. Over 5,000 homes are likely to be auctioned in Sydney in November – clearly a monthly record.

Sydney’s west was the leading suburban region this weekend with a strong 85.7 per cent clearance rate. The south was next best with 82.3 per cent, with all other regions below 80 per cent, led by the inner west with 79.8 per cent and Canterbury Bankstown and the northern beaches each with 75.7 per cent. The city and east reported the lowest regional clearance rate at the weekend with 69.8 per cent.

Standout auction sales results in the west at the weekend included a four-bedroom home at 23 Maud Street, Lidcombe, which sold for $1,465,000 by Ray White Lidcombe; a three-bedroom home at 29 Rawson Street, Lidcombe, which also sold by Ray White Lidcombe for $1,400,000; a five-bedroom home at 13 Thomas Street, Merrylands, which sold for $1,330,500 by Royale Real Estate Sydney; and another five-bedroom home at 23 Tilba Street, Berala sold for $1,300,000 by Ray White Lidcombe.

The most expensive property reported sold at auction at the weekend was a four-bedroom home at 29 Monash Crescent, Clontarf, which sold for $4,875,000 by Belle Property Mosman. The most affordable property reported sold at the weekend was a one-bedroom unit at 3/146-152 Cleveland Street, Chippendale, which sold for $160,000 by Richardson and Wrench Surry Hills Redfern.

The Melbourne weekend auction market resumed on Saturday after last weekend’s pause for the Melbourne Cup holiday long weekend.

Strong auction numbers impacted on the market with the clearance rate falling sharply to 71.6 per cent. This was the lowest reported by the Melbourne market since the first weekend of July, over four months ago, and well below last weekend’s holiday result of 80.0 per cent, and also below the 73.1 per cent recorded over the same weekend last year.

A total of 977 homes were listed for auction at the weekend in metro Melbourne, which was unsurprisingly well above last weekend’s 132 and also just higher than the 961 auctioned over the same weekend last year.

Melbourne’s four-weekend average clearance rate now stands at 74.3 per cent compared to 78.8 per cent over the previous four-weekend period. Strongly rising auction listings will continue to test the market through the remainder of November, with the underlying trend now clearly waning.

Melbourne’s south east reported the highest regional clearance rate at the weekend with a strong 84.0 per cent result. Next best, however, were well below and led by the outer east with 76.5 per cent, the north east with 75.2 per cent, the inner south with 71.9 per cent, the inner east with 70.9 per cent and the inner city with a clearance rate of 69.5 per cent.

Notable sales in the south east reported at the weekend included a five-bedroom home at 8 Tori Place, Patterson Lakes, which sold for $722,500 by Hockingstuart; a three-bedroom home at 14b Black Street, Chelsea, which sold for $717,500 by Ray White Chelsea; another three-bedroom home at 16 Whitworth Avenue, Springvale, which sold for $700,000 by McDonald Real Estate; and a four-bedroom home at 12 Governor Arthur Drive, Patterson Lakes, which sold for $686,000 by Hockingstuart.

The most expensive property reported sold at auction at the weekend was a five-bedroom home at 9 Cole Street, Hawthorn East, which sold for $3,800,000 by Hockingstuart. The most affordable property reported sold at the weekend was a one-bedroom unit at 18/697 Barkly Street, West Footscray, which sold for $171,000 by Sweeney Footscray.

Auction activity will continue to rise over the next five weekends, testing the market with buyers spoiled for choice and sellers looking for a result before Christmas.

Solid auction activity in Melbourne and Sydney this spring has been generated significantly by low interest rates. Last week the Reserve Bank predictably decided to leave interest rates at the 60-year low of 2.5 per cent for the 15th consecutive month – the longest steady sequence since 2003.

With house price growth now moderating in most capitals within an overall flat economic environment, interest rates are set to remain on hold through to 2015. A continuing deterioration in the jobless rate, however, will increase the likelihood of a rate cut sooner rather than later in the New Year.

Latest jobless data from the Australian Bureau of Statistics (ABS) reports the national unemployment rate remained fixed at 6.2 per cent over October – the highest level since March 2003. The Victorian unemployment rate remains stuck at 6.8 per cent – the highest rate recorded by the state since December 2001.