» Auction clearance rates remain high

Auction Clearance Rates Remain High 

Despite rising interest rates, results show that auction clearance rates continue to surge in Melbourne and Sydney. According to data of the Australian Property Monitors, the clearance rate in Sydney is at 71.2 percent on 359 listed houses. This is a 1.4 percent increase from the clearance rate during the weekend before Easter. 

Meanwhile, the clearance rate in Melbourne slightly dropped to 77.9 percent on 495 listed houses from its previous rate of 78.4 percent during the Easter weekend. During this period, a $2.4 million, four-bedroom house in Hawthorn proved to be the most expensive property that was sold during the auctions on the said dates. 

On the other hand, the top property that was sold in the Sydney auctions is a $4.6 million, four-bedroom property in South Coogee. This strong showing at the auction houses continued despite the increase of the official cash rate by the Reserve Bank of Australia from 4 to 4.25 percent. 

Australian Property Monitors head Yvonne Chan said that the increase in interest rates registered minimal to zero effect to auction clearance rates. Chan added that clearance rates will remain strong even if the interest rate reaches 5.25 percent due to the housing shortage. However, she indicated that property prices will once again be on the rise. 

According to property information provider RP Data-Rismark, the average price for a property is a $455,000. Data from the Australian Bureau of Statistics also show that in 2009, prices grew by 14 percent.Despite this rate, Jellis Craig estate agent Scott Patterson said that though April includes school holidays, Easter and Anzac Day, auction offerings have been few but buyer confidence and clearance rate remains high.

Patterson also added that supply and demand forces are at strong play and it has created a market for sellers. He also emphasized that auction listing in May will provide relief for buyers despite the housing shortage. Despite the steady auction clearance rate, home loans dropped by 1.8 percent in February to 50, 287 after a 7.3 percent drop in January. February marks the fifth straight month that registered a decline in home loans.