Auction clearance rates bounce back

By Leith van Onselen

Auction clearance rates bounced back over the weekend in Australia’s two major markets, with volumes also up significantly.

In New South Wales, a provisional auction clearance rate of 63% was recorded from 549 auctions reported to the REINSW. This compares to a provisional clearance rate of 58% recorded last weekend on 436 auctions. However, the number of homes auctioned was below the same weekend of last year when 570 homes went under the hammer.

In Victoria, a provisional auction clearance rate of 64% was recorded over the weekend on 624 auctions reported to the REIV. This compares to a provisional clearance rate of 60% recorded last weekend on 661 auctions, which was later revised down to a clearance rate of 58%.

Although this weekend’s provisional clearance rate was well above the 52% clearance rate recorded in the same weekend of 2011, the number of homes auctioned was lower, with 624 homes going under the hammer over the weekend versus 688 auctions in 2011.

Once again, last week’s auction clearance rates published by the REINSW and REIV – both 58% – were more positive than those reported later in the week by RP Data, where clearance rates of 56% and 57% respectively were recorded for Sydney and Melbourne:

Twitter: Leith van Onselen. Leith is the Chief Economist of Macro Investor, Australia’s independent investment newsletter covering trades, stocks, property and yield. Click for a free 21 day trial.

 

Leith van Onselen

Comments

  1. I’m not convinced that rising clearance rates mean a rising house prices. Actually, I think the opposite may be true. Vendor’s are capitulating.

    • Exactly, Ortega. I don’t know why we tolerate being led around by the nose with the ‘Clearance Rate’ factoid. Consider the sharemarket, where we track both price and volume. If some quant suggested an ‘Offerer Satisfied’ metric, there would be howls of derisive laughter.

      I still see a spring capitulation when the futbol ends. No one HAS to buy RE, but some definitely have to close out so prices will fall – the exact timing of which is only clear in hindsight.

      Don’t Buy Now!

  2. i dont like to say it, but it looks like we are not going to see 5-10% falls in Melbourne again this year. The fact is, some people are suckers for low int rates and these will probably keep prices stable, but certainly no big rises – either flat or small deviations either way.
    … but given it would cost me 60-70k a year more to buy the house I rent, without big gains only a remote chance, I’m staying put.

    • Fair call. The large falls predicted in Melbourne seemed to be based on gross oversupply. From where I sit the explosion in stock levels have been crap quality ex rentals or apartments coming on line in the CBD/docklands area.

      Decent offerings still sell fast, the ex rentals will languish forever until a sucker turns up (absent any pressure on the vendor) and the apartment stock is of more interest to foreigners, so won’t have much of an impact from an oversupply viewpoint. They like to keep them ‘unused’.

      I’ve come to conclude the difference between now and boom time c2009 is the speed at which those crap properties sell. Even they were hotcakes back then.

      This pick up over the last month or so is due to the interest cut lag and spring seasonality. The 95% or so who still earn an income see property as a one way bet and those who might be feeling the pinch ironically see it as a way to secure their future. No more hail mary bets at the pokies, just buy some property!

      • ??

        Calling another boom already?

        I think this tossing around in the property market is just early noise in what will ultimately be a very long-term house price collapse in this country.

        There is not a single positive in the global economic horizon that would indicate to me that house prices in Aus will significantly rebound from here and ‘hold’ already ludicrous highs.

  3. Bull shiite

    Ten days ago Reiv expected around 750 auctions for last weekend. “Next weekend the REIV expects around 750 auctions before most sellers take a break on the weekend of the AFL grand final.

    Enzo Raimondo
    CEO REIV”

    Given that most auction marketing runs for approx.4 weeks why are there now a lot less reported even taken into accounted the so called missing results. Failed auction campaigns are dissapeared by the RE junta whilst sold before auction are included. The numbers are rigged. Let’s keep questioning this real estate pr fraud, because very few journalists do.

    • My senitments exactly. What’s happening to failed auction campaigns that seemingly evaporate from statistics?

      If there really was a crash happening you can bet that people with vested interests (real estate agents, banks, valuers, speculators etc etc) will be doing their best to hide it from the public. “No result” auctions or agents that fail to report really make me suspicious about what’s really happening.

  4. Forrest GumpMEMBER

    Did anyone pick up on the tactic of “Downward Revisions” of data that the RE industry is now using? I see that last weeks auction clearances were revised downward by 2%.

    This neat little trick enables the first round of announcements to have a positive spin of “Auction Rates Pick up”, then the following week, the figures are revised down so the next news spruik compares the newest results with those that were revised down! So again,the announcemnt reads “Auction Clearance Rates increase over last week”. Its a never ending spruik fest!

    Anyone that has confidence in this data should be using comic books as a guide.

  5. How does the total volume figure compare to last year ? That might give an indication of the direction of prices.

  6. I know how unreliable anecdotal evidence can be, but I thought this was worth mentioning. Last weekend I met a guy who recently bought a 2br fixer-upper in South Yarra. The asking price was originally 800k. This guy put in a cheeky offer for 600k…

    After 3 weeks of calls from the agent to the tune of ‘theres another buyer’ and ‘youll need to do much better than that’, he kept his poker face and only raised his bid to 605k. Much to his surprise, the seller actually accepted. He subsequently found out the seller was a bank.

    Not a bad outcome if I ever heard! Still waiting for that grand final siren to see what happens.