Melbourne clearance rate falls below Sydney, but Bardon home leads Brisbane market
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Nov 19, 2018
Melbourne clearance rate falls below Sydney, but Bardon home leads Brisbane market
Melbourne has overtaken Sydney as the weakest auction market, but a Bardon auction has agents hopeful about the Brisbane market.
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Ray White New FarmPictured: 34 Satinwood Court, Bardon. Sold under the hammer $4.275 million by Matt Lancashire of Ray White New Farm, as seen on Luxury List.
Melbourne has officially overtaken Sydney as the nations weakest housing market, according to the latest preliminary figures, after returning a clearance rate of just 43.5 per cent from more than 1,400 auctions.
Sydney managed a marginally better clearance rate of 48.5 per cent from 874 auctions.
AMP Capital Chief economist Shane Oliver says these figures suggest Melbourne is now starting to look weaker than Sydney.
“[Housing] weakness continues on the back of tighter credit, rising supply and less foreign demand," Mr Oliver said.
"FOMO [fear of missing out] in reverse, possible changes to negative gearing and capital gains tax" were all having an impact on housing demand," he added.
The national preliminary clearance rate came in at 45.5 per cent, compared with last week's final auction clearance rate of 42.7 per cent, the lowest reading since June 2012.
Source: CoreLogic
Mr Oliver says while the chances of a housing market crash are unlikely, the risk can’t be ignored.
“The risk of a crash cannot be ignored given the danger that banks may overreact and become too tight and that investors decide to exit in the face of falling returns, low yields and possible changes to negative gearing and capital gains tax,” Mr Oliver said.
Brisbane
The auction of a luxury Bardon home has local agents hopeful about the health of Brisbane’s market.
34 Satinwood Court sold under the hammer for $4.275 million, attracting five registered bidders who were all prepared to spend millions to secure the sprawling five-bedroom home.
Bidding opened at $2.8 million, progressing in $100,000 increments until it hit $3.9 million when bidding was paused.
The determined bidder lifted the price to $4.275 million, and the house was put on the market and sold.
It was the top sale for Ray White across Australia and New Zealand for auctions on Saturday.
Agent Matt Lancashire of Ray White New Farm told WILLIAMS MEDIA the sale of the home is a good sign for the health of the Brisbane auction market amid falling clearance rates across the nation.
"To have five registered bidders with the ability to spend $4 million is a great testament to the purchasers out there."
Auctioneer Justin Nickerson of Apollo Auctions told WILLIAMS MEDIA the South East corner put in a strong performance.
"South East Queensland continued its strong surge into the festive season, with another week recording a clearance rate in excess of 50 per cent. Whilst registered and active bidder numbers were down on last week, a number of sales occurred with one bidder auctions – which have been a trend in recent times."
Sydney
President of the Real Estate Institute of New South Wales (REINSW) Leanne Pilkington says it's unlikely clearance rates will rise before Christmas.
"Similar to the combined capital cities, the final auction clearance rate for Sydney has been below 45 per cent for three of the past four weeks, and it’s likely that we will see that again this week as final results are collected.
"In comparison, one year ago, the clearance rate across the city was recorded at 54.8 per cent. Agents do not anticipate much change to clearance rates this side of the Christmas break," she told WILLIAMS MEDIA.
But Ray White Group chairman Brian White says there are “tentative signs of stabilisation in Sydney” and believes the market adjustment may finally be coming to an end.
“Everyone wants to know where the market is going and we are seeing the first steps that the downturn in Melbourne and even Sydney is slowing. We have great confidence that the market adjustment is coming to an end.
"Our strong auction results and high numbers of onlookers show us that there are buyers out looking. Everyone wants to buy at the bottom of any market, so attending auctions will give you the best real-time price auction," he told WILLIAMS MEDIA.
Melbourne
Melbourne was host to 1,411 auctions this week with preliminary results showing a clearance rate of 43.5 per cent, down from last week when 46.2 per cent of auctions were successful.
Over the same week last year, the auction clearance rate was significantly higher with 66.9 per cent of the 1,732 auctions returning a successful result.
Local agent Jeremy Desmier of Fletchers Canterbury says his local market has seen a price adjustment.
"The markets I work in (North Balwyn) had lots of Chinese immigration last year, and it was really inflated, so this year with overseas money influence having softened for a variety of reasons, it's harder to get money out of China and local lending has tightened, so the pockets that were heavily inflated last year have seen the biggest corrections."
Mr Desmier urges sellers to still consider auctions.
"I think auctions are still good to establish where the market is, so I'm a big believer in them. Average time on market for auctions is still significantly less than average time on market for private sale properties. If something doesn't sell at auction people talk about a 'failed auction' - well it's just a step in selling. If you haven't sold a home in three or four weeks through a private sale you don't say it's 'failed', it's still on the market."
Among the smaller auction markets, Adelaide returned the highest preliminary clearance rate of 64.4 per cent from 113 auctions.
Related reading:
Southeast Queensland suburbs among best in state for price growth
30 per cent drop forecast for Sydney and Melbourne, but Hobart outlook is strong: SQM Research
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