As I mentioned early last week, AFG’s lending figures pointed to a surge in new finance activity. The problem was, as I said in the post, that there weren’t any other leading indicators that matched this trend. The housing stock on market continues to rise, albeit at a slower pace, and auction clearance rates certainly didn’t show any movement away from their long term downwards trend.
After last weeks rate cut I would have expected to at least see something that resembled a small recovery in any of those figures. But alas, it seems not:
From Sydney.
Sydney’s auction clearance rate plunged at the weekend to the lowest level recorded for the year.
A downward trend in buyer activity has been emerging over the past few weeks with the traditionally strong spring selling season failing to generate any late-year momentum.
The weak clearance rate is despite increased numbers of first home buyers looking for established properties before their stamp duty concession expires at the end of the year, and vendors keen to sell before Christmas.
At the weekend 635 properties were listed for auction – the third-highest for the year and higher than the same weekend last year. Of the 437 reported auctions, 254 were sold and 66 withdrawn, for a clearance rate of 50.5 per cent.
and Melbourne
REIV spokesman Robert Larocca said Melbourne’s clearance rate for the year is running at 56 per cent, a level not seen since 2004 when dummy bidding was outlawed, and well down on last year’s mid-70s average.
”There’s no doubt it’s a very different market this year,” Mr Larocca said.
That certainly doesn’t look like a market that has been affected by a new surge in lending or, more interestingly, one affected by a change in interest rates. Perhaps Gail Kelly’s call that interest rates cuts would lead to more disleveraging rather than more buying was the correct one?
The ABS data for housing finance is released today, unfortunately it is only for October so I still have to wait another month to work out the current quandary around the November AFG data. The leading indicators suggest today’s data will be weak.