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A sign stands at the front of a house after it was sold at an auction in the Sydney suburb of Waverley in Australia May 28, 2015. Australia and New Zealand are looking outside traditional monetary policy to do the same thing -- cool red-hot housing markets in their biggest cites without hurting borrowers, banks and their economies -- but they are following different paths. The success, or not, of these experiments could prove critical to the outlook for interest rates in both countries, while offering a guide to other rich nations on how to manage housing booms when the broader economy still needs support. Reuters/David Gray

The first round of Sydney auctions of spring selling season marked a weak beginning, with investors demanding a slowdown. The auction clearance rate of 75.1 percent over the weekend was the second lowest recorded for the year.

As compared to winter auctions, Sydney auctions over last weekend has debilitated with clearance rates sliding well below 80 percent. Although the clearance rate remained stable for about 22 consecutive weeks, since winter auctions, the clearance rate has been on the weaker side for 8 consecutive weeks.

The auction market scene in Sydney was different a year ago, with clearance rates recorded well above 80 percent. Last year for the same weekend, the clearance rate was recorded at 82.7 percent, which has nearly fallen about 10 percent this year.

Since last month, Sydney’s west and south west have been continuously underperforming with low clearance rates. According to the Domain group, the weak clearance rate could be attributed to tightening of bank lending policies which has kept investors away from targeting lower-priced properties with greater yields.

However, in spite of low records, higher number of auction listings has kept supply in pace with the demands for wider range of properties.

The first weekend of September listed some 817 auctions, which are little lesser than the last weekend (811) but well higher than last years’ same weekend that listed only 522 auctions. Although auction season has just arrived, Sydney had already conducted over a thousand auctions in August.

In August, Sydney hosted about 3,756 auctions, 63.2 percent higher than what it was last year over the same period. With September auctions going on, it is expected to break the record of auction listings set for the month as more than 800 homes would be up on sale every Saturday of this month.

Meanwhile, the north-west suburban region of Sydney recorded a high clearance rate, improving the overall clearance rate. The Blue Mountains in Sydney’s north-west recorded the highest clearance rate at the weekend as the two houses listed from the region got sold.

With higher priced auctions, the clearance rates were also recorded to be higher indicating higher levels of buyers and sellers over the weekend. The most expensive property sold was an eight-bedroom home at 4 Woodside Avenue, Burwood, for AU$6.5 million by Raine and Horne Burwood, whereas the most affordable property sold was a two-bedroom unit at 19/60-62 Speed Street, Liverpool, for AU$355,000 by Prudential Liverpool.

Notably, auction prices have increased over August from AU$1 million to AU$1.09 million. It has gone up by 13.1 percent, representing Australia’s hot housing market growth and the effects of the underlying prices. Meanwhile, another rate cut could be expected from the Reserve Bank of Australia, but for the month of September, it has left interest rates on hold.

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