Sydney and Melbourne auction rates soften as prices ease
Australia’s auction market is showing a widening split between the two largest capitals and smaller cities, with Sydney and Melbourne weakening while Brisbane, Adelaide and Canberra recorded stronger preliminary results.
The combined capital city clearance rate was 56.5 per cent last week, up from a preliminary 55.1 per cent. That lift was driven by smaller markets, while Sydney and Melbourne both softened after stronger results the previous week.
For property investors, the auction data comes as higher interest rates, persistent inflation and a sharp slowdown in investor borrowing continue to weigh on housing conditions. Investor borrowing is falling at its fastest pace in 3½ years, while vendors are lowering expectations and some buyers are holding back in anticipation of further price declines.
Reserve Bank governor Michele Bullock warned last week that housing values had further to fall and indicated another interest rate rise remained an option.
Cotality research director Tim Lawless said on Sunday that home values were continuing to lose momentum through August. He said the current level of auction success was consistent with falling values and a market favouring buyers. Clearance rates also remain below the decade average of 68 per cent.
Sydney and Melbourne lose momentum
Melbourne recorded the larger fall, with its preliminary clearance rate dropping to 57.4 per cent from 60.8 per cent, the lowest result in three weeks.
In Malvern, a three-bedroom home at 38 Johnstone Street passed in on a $2 million vendor bid before selling afterwards within its $2 million to $2.1 million guide range. Jellis Craig sales agent Carla Fetter described the market as uneven, with results varying significantly from property to property.
Sydney’s preliminary clearance rate slipped to 55.6 per cent from 57 per cent. In Roseville on the upper north shore, a downsizing couple sold their three-bedroom family home for $2.33 million at auction after bidding opened at the $2.2 million guide price.
The vendor, Peter, who asked for his surname not to be published, said the couple had already bought an apartment and wanted to complete the sale quickly.
Smaller capitals post stronger results
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Brisbane’s preliminary clearance rate rose to 51.9 per cent from 38.1 per cent, with 145 auctions scheduled. The report noted strong demand from downsizing Baby Boomers with housing equity for luxury homes.
In South Brisbane, developer Mosaic sold a four-bedroom, 394-square-metre apartment in its 213-unit Riversdale development for $11 million, equal to $30,640 per square metre. The sale lifted revenue in the 39-level project at 91 Montague Road to $450 million of a total $750 million.
Adelaide’s preliminary clearance rate increased to 61.9 per cent from 46.8 per cent across 88 scheduled auctions. Canberra’s initial rate rose to 60 per cent from 45.9 per cent a week earlier.
In Canberra’s southern Woden district, a four-bedroom home at 9 Cornelian Place sold under the hammer for $1.38 million, just above its $1.35 million reserve, to a young family renting in the area. The property was marketed by The Agency’s Stu Hamill.
