Auction numbers continue to rise across Sydney and Melbourne, defying the usually quiet winter conditions.
According to CoreLogic, there was a 13.1% increase in the number of homes taken to auction across the combined capital cities this weekend (1,961 versus 1,734), with auction volumes also higher than the same weekend last year:
The added volumes saw the preliminary clearance rate fall further, down 0.50% to 70.2%, which will likely fall into the mid-60s after final results are collected.
Melbourne held the most number of auctions this week (846), continuing an unseasonal trend of increase, up 24.4% from last week.
A preliminary clearance rate of 69.9% was recorded from the 668 results recorded.
Sydney was host to 760 auctions this week, a lift of 9.4% on last week’s 695 dwellings auctioned.
The preliminary result, from 573 outcomes collected, is showing a clearance rate of 72.4%, down -1.8% on last week’s preliminary result (74.2%).
Ray White chief economist Nerida Conisbee suggested property listings would continue to rise as more investors sell-up.
“It’s hard to know exactly what’s going on but it does seem to be high levels of investors selling, which was what we thought at the start of the year”, she said.
“I think a lot of it has to do with high interest rates. Cost of debt is expensive but also there’s just so many potential problems for landlords that is making it more and more difficult to own an investment property.
“There are a lot more restrictions and talk of rental caps, which is a shame as there are likely to be fewer investment properties”, she said.
A week ago, The AFR posted the below chart showing a large increase in for sale listings from investors across Sydney and Melbourne:
CoreLogic’s monthly chart pack shows a similar trend nationally:
On the other hand, Australian Bureau of Statistics mortgage finance data shows an uptick in demand from investors:
This suggests there is some churn going on with investors selling to other investors.
Given rents will continue to rise strongly on the back of record levels of immigration, and the Reserve Bank is likely to begin easing interest rates next year, the climate facing investors should improve markedly in 2024.
