Residential property market facing uncertain times

Auction clearance rates are well above 2019 results but down from recent weeks

16 March 2020 | Dr Andrew Wilson, My Housing Market

The Sydney auction market stood tall at the weekend reporting another robust clearance rate despite continued uncertainty over the general impact of the coronavirus.

Although Sydney’s Saturday clearance rate of 75.5% was again down on the previous weekends 80.5%, it nonetheless still reflects a market clearly in favour of most sellers – and well ahead of the 64.3% recorded over the same weekend last year.

644 homes were reported auctioned on Saturday which was lower than the previous weekends 675 auctions but well ahead of the 539 listed over the same weekend last year

Sydney’s median weekend auction price of $1,120,000 was well down on the previous weekends $1,230,000 and also lower than the same weekend last year’s $1,200,000.

Despite an easing in overall clearance rates a number of regions continue to record boom time results led at the weekend by the Northern Beaches with 88.9%.

The growing distractions and associated hysteria of the coronavirus may impact housing market activity in the short-term, acting to ease recently strong buyer and seller activity. The robust Sydney market however is set to maintain this year’s capital city performance leadership.

Melbourne market still favours sellers

The Melbourne auction market resumed on Saturday following last weekend’s pause in activity due to the Labour Day holiday.

Although clearance rates were down on recent strong results, the market clearly remains in favour of sellers with no significant drop-off due to the coronavirus fear-factor.

Melbourne recorded clearance rate of 70.2% on Saturday similar to the previous weekends 71.9% but well ahead of the same weekend last year’s 56.9%.

Auction numbers were predictably higher this weekend with 1090 compared to last weekend’s 345 and well ahead of the same weekend last year’s 744 auctions.

Melbourne recorded a weekend median auction price of $865,000 which higher than the previous weekend’s $793,000 and 11.5% higher than the same weekend last year’s $776,500.

Melbourne’s top performing region at the weekend was the Inner South with a clearance rate of 76.8% followed by the North with 76.0%.

2,220 homes taken to auction across the combined capital cities this week, returning a preliminary auction clearance rate of 70.6%. In comparison, 1,494 auctions were held last week, returning a final clearance rate of 68.6%.

The final auction clearance rate likely to will revise below 70% for the second week in a row

Dr Andrew Wilson is Chief Economist of My Housing Market