The preliminary auction clearance rate in Australia has remained robust, exceeding 70 percent for the eighth consecutive week. This trend coincides with expectations of a potential interest rate cut later this month, which many buyers are eagerly awaiting. According to data from Cotality, the national clearance rate stood at 72.3 percent, slightly down from 74.7 percent the previous week.
In Sydney, the preliminary clearance rate reached 74.9 percent, marking the third highest for the year. Meanwhile, Melbourne recorded a clearance rate of 71.8 percent. Despite traditional winter slowdowns, these figures indicate a resilient market.
Market Trends and Predictions
Listing volumes have decreased in several markets, but Louis Christopher, an analyst and founder of SQM Research, anticipates an increase as the spring selling season approaches. “The market is clearly stronger than where we were this time last year,” Christopher noted. He highlighted a noticeable uptick in buyer sentiment, particularly in Sydney.
The upper end of the market is exhibiting more strength compared to lower segments, with Sydney’s eastern areas outperforming the west in terms of clearance rates. This trend may shift as first-time buyers enter the market, encouraged by lower borrowing costs.
Recent inflation figures may influence the Reserve Bank’s decisions. The headline consumer price index (CPI) fell to a four-year low of 2.1 percent, setting the stage for discussions during the Reserve Bank’s upcoming meeting on August 11-12, 2023. Christopher believes this could lead to an influx of first-time buyers seeking homeownership opportunities.
Highlighted Sales and Regional Performance
An auction in Sydney’s inner west drew significant interest, exemplified by a two-bedroom, freestanding home at 9 Petersham Street. Initially guided at $1.5 million, the price increased to $1.6 million as competition heated up. Ultimately, the property sold for $1,978,000, well above its reserve of $1.7 million. The home was on the market for just 14 days before the auction, which was moved forward due to high interest. The selling agents, Cobden Hayson, reported over 100 inspections and 17 registered bidders.
In the smaller markets, Brisbane maintained a preliminary clearance rate of 71.1 percent for the second week, while the Australian Capital Territory (ACT) saw a decline to 65.8 percent, down from 73.7 percent the previous week. Adelaide’s preliminary clearance rate dropped to 65.1 percent, marking the lowest since early June.
Looking ahead, auction numbers are expected to remain steady. Approximately 1,570 homes are scheduled for auction next week, with projections rising to around 1,900 the following week as the spring selling season draws near. The current dynamics in the auction market reflect a blend of optimism and strategic positioning as buyers prepare for potentially favorable financial conditions.
