The auctions market managed to hold up well despite the replay of the AFL Grand Final and NRL Grand Final weekend, but experts say sales during the first month of Spring indicate the property market will remain subdued for the rest of the year.
The comments come as the property market braces for a likely interest rate rise tomorrow, although REIA head David Airey says the speculation regarding a rise has hurt the industry more than the rate rise itself.
Figures from the REIV show 473 auctions went ahead on the weekend, with 348 selling resulting in a clearance rate of 74%. On this weekend last year, there were 486 auctions with a clearance rate of 84%.
The performance comes after experts expressed fears that buyers who postponed their sale, only to have it fall on another Grand Final day, would be disappointed with the result.
About 20% of auctions were postponed until next weekend, the REIV said, but spokesman Robert Larocca says sellers had nothing to fear.
“Those fears didn’t come to pass and in fact, the clearance rate was slightly better than what we saw throughout September.”
Results were fairly solid throughout the country as well, with Sydney recording a 57% clearance rate with 83 properties sold out of 130, with sales totalling $61 million. Brisbane recorded a 60% rate with 18 properties solid, while Adelaide recorded a 48% with 10 properties sold.
But other experts say while this weekend may have exceeded expectations, the overall performance for the month of September suggests the market will remain subdued during Spring. According to APM general manager Anthony Ishaac, Melbourne recorded an overall clearance rate of 69%.
While he says this is a “sound” result, he also notes that listings fell by 7.8% compared to last year, dropping to 2,165. “Combine softer clearance rates with a decline in auction listings and the only outcome is for a fall in the number and value of properties sold at auction,” he wrote today.
Larocca argues the tone for this month will set the pace for the rest of the year and that, “we expect clearance rates to be in the high 60s and low 70s until Christmas”.
But Real Estate Institute of Australia president David Airey says the average price of each of those properties sold is less than the average from last year, and that prices will continue to drop as the market cools.
“Prices have dropped marginally, and the Victorian properties selling at auction now are moving towards the median price. The higher you go above that, the harder it gets.”
Figures show this weekend’s median prices came to $635,000 for houses and $502,500 for units. Those figures represent a decline from 11 October last year, when prices were $673,000 for houses and $503,800 for units.
But Airey also says the market is being disrupted by the constant threat of interest rates – and the speculation associated with each RBA meeting. He says movement in either October or November will hurt sales during Spring.
“I have counted several articles in the press during the last few weeks headlining the rate rise. If you want to damage the market and confidence, that’s what you need to do. All that talk is taking the confidence away from buyers.”
“Of course, we’re hearing that it might not happen because housing prices are lowering. But the speculation is taking away confidence and that will have an impact.”
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
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