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Spring auction season commences cont'd.....
The Spring auction season began with a snivel at the weekend, with the number of sales in the Eastern capitals down on the week before. This may be a message for developers releasing stock into the market, and resi investors holding units with a value less than $500,000.
The first weekend in Spring is usually a bumper, but it appears the RBA’s rate hike has taken a shine off auction results.
Melbourne. Properties listed for auction was down 10% from the week before. Only 202 properties were sold in Melbourne at the weekend, down from 235 the previous week.
Sydney. There were 246 properties listed for auction in Sydney at the weekend, down on 281 the previous week. 130 properties offered at auction were sold, down slightly on 135 the previous week. There is ongoing evidence the Sydney residential property remained a two-tiered sector, with demand much stronger for properties at the top end of the market in suburbs with strong owner occupation and freehold freestanding assets.
Brisbane. Auction clearance rate fell to 37.8 per cent from 42.3 per cent the previous week, although those sales were drawn from a small sample in a market dominated by private-treaty sales.
Real estate agents, particularly in Sydney and Melbourne, fear the latest interest rate rise and continued lack of affordability will prevent an increase in sales this spring. Many of the properties entering the market are from suburbs with low owner occupancy rates, indicating investors may be hard pressed to achieve their price expectations within a reasonable selling campaign. Sources refer to a "resistance" from sellers, particularly from those who own investment properties worth $500,000 and less.
This also has an impact of developers who are releasing finished stock into the current investor market. Realistically, these early results may continue to suppress development site valuations as project revenues from unit sales remain soft.
*Metfund acknowledges source material published by The Australian.
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