April 19, 2011 – Auction clearance rates have remained stuck in a holding pattern due to picky buyers.
During the weekend, reasonably low clearance rates persisted to weigh on the Melbourne and Sydney property markets in spite of strong listings.
In Melbourne, capping the busiest pre-Easter 2 week celebration on record, there were just over 1000 properties that were presented, with 50 more properties put on the block than last year.
However, the Real Estate Institute of Victoria reported that the clearance rate in Australia’s auction capital continued to remain stuck at just 62 per cent, down as compared to this time last year when it was more than 80 per cent.
Of around 388 million worth of property that was sold during an auction, only sales amounting to $309m were private sales.
Similarly, Sydney also experiences the same auction story wherein on Saturday, 641 properties were listed for auction, which is close to a record for the year so far.
From about last week, clearance rates were up slightly at 55.2 per cent, but down from 70 per cent at the same time last year, according to Australian Property Monitors.
There were 457 reported auctions and a further 70 auctions were pulled out. All in all, there were 291 properties that were auctioned amounting to about $230m.
Meanwhile, in Adelaide, clearance rates had gone up to 48 per cent compared from 45 per cent of last week. This is due to the 25 properties that were reportedly sold at auction which worth in a combined amount of $10.7m.
However in Brisbane, with six properties sold worth $2.9m, clearance rates has declined to 18 per cent from 28 per cent.
Andrew Wilson, APM senior economist, commented that after last year’s boom, it was still a buyers’ market and the fact that clearance rates were holding was probably a positive sign. He also observed that in Sydney, the market is holding and there is a sense that confidence is growing, although slowly.
He anticipated that the Melbourne market to move sideways to slightly lower, which is said to be coming off a bigger boom.
According to John Bongiorno, the director of Melbourne auctioneers Marshall White, buyers were becoming a bit more “discriminating” and a pressure on price occurs due to the increase in supply.
However, he observed that clearance rates in the blue-chip parts of Melbourne, for instance the inner-eastern suburbs, were up in the mid-70s, and after Easter. He expected supply to tighten.
