The property market has remained strong for the past 12 months, but now amid concerns of rising interest rates and threats of a global economic slowdown – property buyers are holding back.
While auctions account for less than a quarter of all dwelling transactions nationally, Cameron Kusher, senior research analyst at Rpdata.com says, “auction clearance rates provide an excellent indication of current market sentiment; the results are more timely than private treaty results which are subject to time lags.”
RP Data is leading the way in collecting and recording capital city auction results. While competitors collect on average 65% of auction results, RP Data dominate at 80%.
The latest figures from RP Data show that the recent number of properties sold in auctions have significantly dropped the last few weeks.
The fall in auction clearance rates has been led by Sydney and Melbourne which are the two largest markets and also the two best performing markets. Eight weeks ago, Melbourne recorded a strong clearance rate of 85.3%, last week that had dropped to 69.4%. Similarly Sydney, recorded 73.7% clearance rate eight weeks ago, and dropped to 63%. At their peak, clearance rates hit 45.6% in Brisbane, 77.8% in Adelaide and 65% in Perth. Last week, these cities achieved 32.5%, 51.4% and 14.3% auction clearance rates, respectively.
Kusher says, “We’ve been suggesting for some time that the rate of property value growth will slow in 2010. It seems as if the recent weakness across auction clearance rates, along with a number of other less buoyant housing sector figures, may be providing the first signs of a residential market slowdown.”
Despite auction clearance rates easing, the total number of auctions taking place has remained very strong. Kusher points out that there is “obviously, no shortage of willing sellers in the market.”
Source: Rpdata.com and Your Mortgage
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