Auction Wrap Up – 20 February 2016

February 22, 2016/ Pricefinder / Auction Results

“A preliminary national clearance rate of 75.3 per cent confirmed a positive momentum for auction sales.”

Auction activity increased again this weekend, with 1,741 properties listed across the nation, representing little change from the corresponding weekend in 2015.

On Saturday, the weekend clearance rate broke through the 70 per cent mark for the first time this year, after reaching 69.4 per cent on the previous Saturday. A preliminary national clearance rate of 75.3 per cent confirmed a positive momentum for auction sales.

Melbourne

On Saturday, Melbourne cleared 77.9 per cent of listings. Despite being a preliminary result, a figure in the mid to high 70s in the nation’s largest auction market provides a good indication of the health of the Australian real estate market in 2016.

Melbourne’s clearance rates have outperformed Sydney’s rates since August last year and have maintained their lead in 2016, closing 1.1 per cent above the Harbour City on Saturday.

The number of listed auctions continued to grow in the Victorian Capital, with 930 properties registered for auction on Saturday, representing a small increase on 2015 figures. In a similar trend to previous years, incremental growth in listing numbers each week confirms a high buyer’s confidence for the Melbourne market.

We expect more than 1,100 listings for the coming Saturday with similar activity for the following weekend, before a quieter Labour Day long weekend.

Sydney

Saturday auction clearance rates broke through the 70 per cent mark on Saturday, after closing short of this figure on the previous weekend. Despite falling short of last year’s 80 per cent plus clearance, Saturday’s 76.8 per cent clearance rate compared well against February’s long-term average.

Auction listing volumes followed previous years’ trend, increasing strongly from one Saturday to the next, and closing at 559 for the most recent weekend. We expect a short-term peak on the last weekend of the month, and again for the pre-Easter Saturday in March.

The Days on market indicator represents the average time it takes to sell a property by way of private treaty. It measures the days from when the property was first advertised to the time it was sold. The Days on Market indicator is used to assess the market’s strength and to judge the balance between supply and demand. When the number of days on the market is low, the market is tight and there is strong demand for properties. When the number is high, there is more stock on the market and buyers take their time before committing.

Observing the yearly cycle, longer days on market are typical for the first two months of the year, while the last quarter often records the shortest days to sell.

In January, Sydney’s days on market indicated a softer market compared to the previous two years. The January average of 73 days was above the 58 days recorded a year before. Numbers above 73 days were last seen in May 2013, signalling a softer market compared to the past two years. A record-low of 33 days was recorded in July and August 2015.

Melbourne

Unlike Sydney, Melbourne’s January 2016 days-on-market continued to decline, recording an average of 85 days compared to 96 days in January 2015. The figure was the lowest since 2010, confirming the market’s resilience and stability.

Odi Reuveni / Research Manager / PriceFinder