Auction clearance rates edged closer to 60 per cent in both Sydney and Melbourne last weekend.
According to the latest data from Australian Property Monitors (APM), 58.9 per cent of properties sold under the hammer in Sydney over the weekend, up from 55 per cent the weekend earlier.
The most expensive property sold at auction in the capital city this weekend was a $1.5 million, four bedroom house in Hurstville, in Sydney’s south.
The most affordable property was a three bedroom house in, which went under the hammer for just $175,000.
In Melbourne, 58.7 per cent of properties cleared over the weekend – marginally up on last week’s result of 55.7 per cent.
While the improvement in auction clearance activity was marginal, Real Estate Institute of Victoria (REIV) chief executive Enzo Raimondo said it was impressive.
“The increase in the clearance rate today is a positive sign that confidence in the residential market may be starting to improve,” he said.
“If the next interest rate movement is a reduction, as is speculated, and that is actually passed on by the retail banks to borrowers it may further increase activity over winter.”
Adelaide recorded a 47 per cent clearance rate, although based on just 15 auctions, while Brisbane saw just 15 per cent of its 28 auctions selling.
This latter result was at odds with the data from Jason Andrew Auctioneers. The independent auctioneer revealed a 35 day clearance rate for South East Queensland of 45 per cent.
The company, which handles around 20 per cent of the South East Queensland auction market, said the average number of registered buyers per auction was 124 per cent, up from 93 per cent, while the percentage actually making a bid fell to 57 per cent, down from 72 per cent. Meanwhile, the average vendor shift from reserve price on auction to achieve a sale under the hammer rose from six per cent to just over seven per cent.
Director Jason Andrew said buyers are clearly suffering from a lack of confidence which he believes stems from recent changes around the financial sector’s position on interest rates.
“One of the most significant factors influencing buyer confidence in the property market has always been interest rates,” Mr Andrew said.
“While traditionally the Reserve Bank has wielded significant power over interest rate setting, in recent times the banks have eroded that influence, particularly with the ANZ’s decision last year to begin reviewing their mortgage rates outside of the monthly RBA cycle.”
“Continuing out-of-cycle increases from the lenders despite the RBA leaving rates on hold all year have been verging on irresponsible, particularly with widespread speculation that this activity is about protecting the bank’s bottom lines rather than the officially cited reason of increased funding costs.”
“Buyers are clearly feeling nervous. The market needs an RBA rate cut in May to restore confidence, but even more than that, consumers need the banks to do the right things and pass any cut on, in full.”