Following a month-long break over Christmas, real estate auctions have started with a bang across the capital cities. Figures released by CoreLogic show that the weighted average preliminary clearance results across all capitals was over 80 per cent for the first two weeks of auctions. Last weekend saw a clearance rate of 83.8 per cent from 1,287 auctions, up slightly on the 81.1 per cent clearance rate from 884 auctions the previous week. All capital cities showed strong clearance rates, not just the more traditional auction markets of Sydney and Melbourne.
The highest clearance rates in the two largest cities last weekend were recorded in Sydney, where 449 auctions were held for a clearance rate of 89.1 per cent. This was significantly higher than the 77.6 per cent clearance rate from 448 auctions a year ago.
Sydney had slightly lower clearance rates the previous weekend at 76.7 per cent from 270 auctions.
Melbourne was slightly behind Sydney this week at 80.8 per cent from 592 auctions, compared with 80 per cent clearance rate from 390 auctions. More significantly, the clearance rates in Melbourne are significantly higher than this time last year when 419 auctions took place for a clearance rate of 68.5 per cent.
Meanwhile, every other capital city had clearance rates of 70 per cent, with Canberra recording the highest clearance rate of any capital city at 92.7 per cent from 59 auctions. Of the other capital cities, Brisbane had a clearance rate of 74.6 per cent from 84 auctions; Adelaide was at 82.8 per cent from 85 auctions; and Perth was at 75 per cent from 17 auctions, while there were no auctions in Hobart.
Capital City Clearance Rates
Auction clearance rates are a leading indicator of how strong property markets are. Auction clearance rates over 80 per cent are considered to be high and are a leading sign that buyer demand for property exceeds supply. A further sign of the strength of the markets can be seen in the low number of new property listings across the country, resulting in limited stock in 7 out of the 8 capital cities. Only Melbourne recorded an increase in stock levels, with a 6 per cent increase in new listings. However, all other capital markets recorded declines in the amount of new stock, with the total stock across all capital cities down by 18.7 per cent on this time last year. The largest declines in new stock were in Canberra, where new listings were down by 7.4 per cent and Perth where new listings were down by 7.9 per cent.
Capital City Listings
As a rule, whenever new and total property listings decline and there is a limited supply, median house prices will inevitably rise.
With the combined capital city clearance rate over 80 per cent for the first two weeks of auctions in 2021 and very low levels of stock on the market, these are strong indicators of the strength of property markets across the country and an early sign that virtually every market in Australia is about to boom at the same time.
The most significant risk to a continuing boom in housing markets across Australia in 2021 will be significant outbreaks of COVID-19 causing further lockdowns and stalling the market.
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AUSTRALIAN HOME LOAN RATES FALL TO RECORD LOW 1.69%
The property market just got another boost with the lowest home loan rate in the market dropping to 1.69 per cent.
Lender Greater Bank announced the new market-leading rate of 1.69 per cent on Tuesday following a cut of 0.2 per cent to its one-year fixed rate for owner occupiers paying principal and interest.
With fixed rates continuing to lead the market with low rates, now could be an opportunity for mortgage holders to fix all or at least part of their loan.
Canstar’s editor-at-large and money expert Effie Zahos says chasing a low rate should be on every homeowners’ radar.
RBA FOCUSED ON LENDING, NOT HOUSE PRICES: LOWE
Addressing the House of Representatives standing committee on economics on 5 February, the Reserve Bank of Australia (RBA) governor Philip Lowe has reiterated that the central bank would not focus on housing prices.
“As we have previously discussed at these hearings, the RBA does not – and should not – target housing prices,” Mr Lowe said.”
“Instead, our focus is on the lending that is used to purchase housing. We want to see lending standards remain strong.” Mr Lowe flagged that if there was a deterioration in lending standards, the RBA and other regulators would respond.
‘LIKE KING STREET ON A SATURDAY NIGHT’: MELBOURNE BUYERS IN INSPECTION FRENZY
There are so many prospective buyers trying to get into Melbourne’s rapidly rising property market that real estate agents are becoming nightclub bouncers and turning people away at the door.
One buyers’ agent likened the experience at a recent Collingwood inspection to lining up to get into a club, with the crowd resembling a typical Saturday night on King Street.
House hunters have been out in force in January, with some agents seeing upwards of 80 buyers wanting to attend a property’s first open-home – when 30 groups once would have signified strong attendance.
BUYERS RETURN TO THE MARKET IN NUMBERS, PROMPTED BY RATE FREEZE
Capital city clearance rates are picking up as low borrowing costs are touted to stick around for another few years, with all cities recording rates of above 70 per cent in the week ending 7 February.
According to the latest CoreLogic Property Market Indicator Summary, 1,287 homes were taken to auction across the combined capital cities last week, which resulted in a preliminary auction clearance rate of 83.8 per cent. This means that over four in five homes, country-wide, sold last week, after the Reserve Bank reaffirmed the record low 0.1 per cent interest rate and hinted that it could stick around until at least 2024.
Canberra and Sydney recorded the highest clearance rates of 92.7 per cent and 89.1 per cent from a total of 59 and 449 homes auctioned, respectively.
10 WAYS TO PAY OFF YOUR MORTGAGE IN HALF THE TIME
Most mortgages last for 30 years, but how good would it feel to pay it off much sooner?
Three personal finance experts shared their top tips on how to halve the time the typical mortgage takes to pay off to enjoy the bliss of more financial freedom.
1. Pay more than the minimum repayments
This doesn’t mean you have to double your repayments; but by adding another two-thirds, you’ll shave 15 years off your loan, says Max Phelps, money coach and founder of finance business Golden Eggs.
“To break this down, a $500,000 loan at 3 per cent over 30 years has repayments of around $2100 per month,” he says. “Two-thirds of this is $1400 per month, so you would need to pay just under $3500 per month to pay it off in 15 years, assuming constant interest rates.
SALES BOOMING: CENTRAL COAST RECORDS ‘EXTRAORDINARY’ BUYER INTEREST
Sales activity on the east coast of Australia is flourishing as an extraordinary influx of people migrate to the Central Coast from Sydney and surrounding areas.
A real estate agency has touted the incredible growth of NSW’s Central Coast on the back of the COVID-instigated trend of working from home and the completion of the NorthConnex tunnel, which has significantly reduced travel time.
According to The Agency, homes on the Central Coast are being snapped up at incredibly high rates. In fact, in January alone, The Agency offloaded a total of 20 properties totalling over $21 million.
CoreLogic’s latest auctions data revealed a 94.4 per cent clearance rate across the Central Coast in the week ended 7 February.