Auction clearances rise as expats flood back into the market

The impact of rate cuts from the major banks has managed to stir the property market, with auction clearance results up in most major cities.

The impact of rate cuts from the major banks has managed to stir the property market, with auction clearance results up in most major cities.

After suffering a few weeks of declines, Sydney has jumped back from a 55% clearance rate last week to 60%, with 192 properties sold totalling more than $92 million.

Brisbane and Adelaide have also rallied significantly. Brisbane saw a rise from last week’s 25% to 37%, while Adelaide leapt from 65% to 73%.

But Melbourne suffered massive disappointment after a relatively strong few weeks.

The city suffered a drop from last week’s rate of 63% to 57%, a second consecutive week of decline, with 332 properties sold, totalling more than $209 million.

Finance broker Loan Market Group is tipping the property sector could receive an unexpected boost from the flood of Australian expatriates returning home as a result of the credit crisis.

The firm reports Australians returning overseas are making home loan inquiries in growing numbers. Many of them are refugees from the struggling banking and finance sector.

President of the Real Estate Buyers’ Agents Association Scott McGeever says the increase is certainly being noted.

“Our members are actually seeing an increase of expats from overseas, so I can only assume they are inquiring,” he says. “It’s similar to what happened in 2004, and that was property prices coming down and the weak Aussie dollar.

“Quite a few [expatriates] are on good wages and have higher repayment capacity – they can afford to take out decent loans and see it as a real opportunity.

“I don’t think there will be a massive boost from expats, but they’ll keep things ticking over.”

McGeever also says while attempting to predict property prices is “crystal ball gazing”, he says a drop of up to 10% may occur in the outer suburbs.

McGeever says properties closer to the city will remain steady, while outer suburban markets will see a drop. He says when unemployment rises, workers in the outer suburbs are the first to lose their jobs, and housing markets tend to reflect that trend.

Come back tomorrow for SmartCompany’s property outlook feature