Sydney auctions returned the strongest results in about two years over the weekend, recording a preliminary clearance rate of 81.5 per cent — a marked improvement from 55.2 per cent a year earlier.
While final clearance figures will likely be revised lower and volumes remain soft, the trend toward higher clearance rates has continued this week, with 901 homes taken to auction across the nation reaching a 70.6 per cent preliminary clearance rate.
Buyer appetite in Melbourne also picked up, reaching its highest point in almost two years to return a preliminary clearance rate above 70 per cent.
The strong results support a growing consensus that the big east coast property markets are reaching bottom and showing signs of stabilising after two years of sharp declines.
Brisbane posted a preliminary clearance rate of 45.7 per cent from 80 auctions, while Adelaide recorded 20 cleared results from 55 auctions. Volumes remained low in Perth, with just 2 auction results from 12 scheduled auctions.
|Clearance rate||Total auctions||Results||Cleared||Uncleared|
^ Preliminary results. Source: Corelogic.
While APRA’s loosening of serviceability requirements and rate cuts has improved access to credit, a tighter regulatory regime will keep prices constrained.
“While the outlook definitely looks more positive, ANZ research does not expect a v-shaped recovery for prices,” ANZ economist Felicity Emmett said.
“[Our] view for some time has been that tightening in credit has been the major driver of weakness and changes to the use of household expenditure measure (HEM) and the introduction of comprehensive credit reporting will offset some of the impact.”
Emmett said that the change in sentiment has shifted from pervasive negativity to cautious optimism.
“Falling interest rates and easing credit requirements have helped to shift sentiment.
“In June, prices rose in Melbourne for the first time in 16 months while prices in Sydney were flat after nearly two years of declines.”
Economic forecaster BIS Oxford Economics now expects Sydney house prices to grow by 6 per cent over the next three years and 7 per cent in Melbourne.