Auction clearance rates in Sydney and Melbourne’s housing markets soar

Sydney Homes — A newly-constructed home is listed as sold on an advertising board in the Sydney suburb of Greenhills Beach, Australia, August 2, 2016. Reuters/Jason Reed

Auction clearance rates in Sydney and Melbourne’s housing markets saw a surge after the Easter and Anzac holidays. Sydney recorded 80.3 per cent clearance rate while hot property market in Melbourne was 81.7 percent, the second-highest recorded for the year.

Clearance rates surpassed 80 percent on a regular basis since the year started based on Domain Group's data for Sydney and Melbourne, which was marginally higher than that of Corelogic. Data from Corelogic indicates that Sydney recorded a preliminary 78.4 percent clearance rate last week. Domain Group says its clearance rates are now above 80 percent.

Over the weekend, the booming northern beaches recorded the highest regional clearance rate at 93.3 percent. Canterbury Bankstown was the second highest at 87.8 percent followed by the south with 87.1 percent. The north-west was at 82.6 per cent while it was 79.5 percent for the inner-west and the lower north.

Sydney saw a higher median price of $1,230,000 on Saturday compared to its $1,152,500 over the same period in 2016. During the weekend, a total of $411.2 million was reported sold. Surging demand driven by strong migration is still impacting Sydney’s rental market.

Dr Andrew Wilson, Domain chief economist, said the uptick may be a result of a rebound after the distraction of holidays for nearly a month. He acknowledges that new results are rebalancing, yet how this month pans out is yet to be seen, Financial Review reports.

Saturday’s clearance rate in Melbourne was higher than it was during the previous weekend when it was at 79.5 percent. In February, the city saw a clearance rate of 82.7 percent, its highest record yet.

Melbourne listed a median auction price of $784,750 over the weekend, which was comparatively lower over the previous weekend when it recorded $866,000. It is 1.3 percent lower than the $795,000 over the same period in 2016. In total, $483.6 million is reported sold.

According to domain.com.au, Melbourne’s rental market is still affected by the rising demand driven by record levels of migration. The median weekly asking rent for a house increased 2.4 percent over the March quarter to $420. Unit rents also rose over the quarter by at least 3.9 percent to $395 a week.

However, residential rental vacancy rates in Melbourne have reportedly tightened over March to 1.2 percent for houses and 1.5 percent for units. Amid recent new developments, residential rental vacancy rates suggest a shortage of vacant rental properties.