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Money Australian property auction clearance rates just hit fresh lows

02:57  18 may  2018
02:57  18 may  2018 Source:   businessinsider.com.au

Australia, New Zealand dollars slugged as U.S. dollar surge shakes emerging markets

  Australia, New Zealand dollars slugged as U.S. dollar surge shakes emerging markets The Australian and New Zealand dollars hit fresh multi-month lows on Wednesday as the relative outperformance of the U.S. economy sent its currency higher across the board.The Aussie dollar was huddled at $0.7435, having touched its lowest since last June at $0.7424. It has now shed almost four U.S. cents in less than three weeks.

Australian auction clearance rates have fallen to the lowest level since late 2015. Sydney, too, recorded a rate below 60%. Auction clearance rates have a reasonable relationship in predicting annual movements in home prices.

Get the latest auction results and auction clearance rates from every Australian suburb. Australian auction results and clearance rates for week ending Sunday 26 August 2018. Presented by.

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For an indicator as close to real-time as you can get, many view auction clearance rates are a pretty good guide as to what's happening in Australia's housing market, including the outlook for prices.

When they're up, market conditions are strong, and vice versa.

Well, if the latest figures from CoreLogic are anything to go by, things are currently pretty weak, especially in Sydney and Melbourne.

Both saw clearance rates fall below 60% last week, leaving the combined capitals figure at the lowest level since late 2015.

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"A total of 2,279 auctions were held across combined capital cities, returning a final clearance rate of 58.2%, the lowest clearance rate seen since late 2015," CoreLogic said.

How auction clearance rates in Sydney and Melbourne compare to recent years

  How auction clearance rates in Sydney and Melbourne compare to recent years Reflecting those trends, auction clearance rates in both cities are also at multi-year lows.The median Sydney price has now fallen by 3.4% over the past 12 months, the steepest decline since mid-2009. Melbourne prices, while still positive over the year at 3.7%, are also growing at the slowest pace since April 2013.

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Across the country, 77.2% of properties offered through auction were sold, CoreLogic found. That compared with a final clearance rate of 72.8% in the previous week and 68.9% for the same time last year.

"Over the previous week, 2,311 homes were taken to auction and a clearance rate of 62.1% was recorded, while this time last year, the clearance rate was much stronger with 72.8% of the 2,409 auctions returning a successful result."

Mirroring recent price data, the decline was led by Melbourne and Sydney, Australia's largest and most expensive housing markets.

Pablo Picasso painting worth $70 million damaged before auction

  Pablo Picasso painting worth $70 million damaged before auction Christie's auction house was forced to remove Picasso's 1943 "Le Marin (The Sailor)" from this week's event after the accident.Christie's auction house was forced to remove Picasso's 1943 work of art "Le Marin (The Sailor)" from this week's event after the painting sustained unspecified damage during its final preparations Friday.

Has Australia 's property bubble just got worse? Auction clearance rates hit 82 per cent in Sydney The Reserve Bank of Australia have cut interest rates by 0.25 per cent In Sydney, 82 percent of the properties listed for auction on Saturday sold

The ratio of successful Australian home auctions , a measure of housing demand, is starting to trend lower in another sign of a slowdown in the nation's property market. While the preliminary auction clearance rate came in higher at 73.9

Melbourne's result, in contrast to those seen in Sydney recently, was especially weak.

"Melbourne’s final clearance rate dropped to 59.8% this week across 1,099 auctions, making it the lowest clearance rate the city has seen since Easter 2014.

"In comparison, 1,144 homes were taken to auction over the previous week, returning a clearance rate of 63.7%.

As well as being the weakest result in over four years, it was also well below the 75% level in the same week in 2017.

Sydney, too, put in a soft showing compared to a year earlier.

"Sydney’s final auction clearance rate fell to 57.5% across 787 auctions last week, down from 63.1% across 797 auctions over the previous week," CoreLogic said.

"Over the same week last year, 960 homes went to auction and a clearance rate of 74.5% was recorded."

The slowdown in Sydney and Melbourne coincides with the introduction of tighter lending standards, especially for interest-only mortgage loans, introduced in early 2017.

Fewer Australian homes will go under the hammer this weekend

  Fewer Australian homes will go under the hammer this weekend Australian auction clearance rates have fallen to the lowest level in more than two years, driven lower by Sydney and Melbourne where more than 40% of properties taken to auction last week failed to sell. Given the reasonable relationship that exists between clearance rates and annual movements in home prices, it suggests recent weakness in Australia's largest capital cities may continue for some time yet.

However, auction clearance rates have started to slip as banks raised mortgage rates after a regulatory crackdown on speculative lending. The successful auctions across capital cities fell to 67.8% last week, recording the lowest clearance rate year-to-date, CoreLogic said.

Other properties may be vacant and often feature interior access. See the Property Details for more information. Buyers can bid, win, and close on these properties using the online auctions on Auction .com.

Affordability constraints, diminished activity from local and foreign investors, along with a general cooling in sentiment towards the outlook for prices, are other factors that have contributed to the recent pullback in prices.

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Across the smaller capitals, the performance was more varied during the week, fitting with the divergence in price movements in Sydney and Melbourne compared to other parts of the country in recent months.

Clearance rates rose in Canberra, Perth and Tasmania but fell modestly in Adelaide and Brisbane.

However, even with the mixed performance, it still wasn't enough to offset the drag caused by Sydney and Melbourne.

The sheer size of these markets regularly dictates nationwide housing market indicators, including prices.

Indeed, the reason why Australian home prices are now lower than a year ago largely reflects recent weakness in these two cities. Prices are already down in annualised terms in Sydney, with growth in Melbourne quickly heading in that direction too.

Given the relationship that exists between auction clearance rates and annual price growth, the results from last week suggest further falls in Sydney and Melbourne could be on the way.

With most housing indicators continuing to weaken, including a sharp, investor-led drop in housing finance in March, economists at ANZ Bank are watching developments in auction clearance rates closely given they are a timely indicator of what is happening in the housing market.

“It is difficult to argue that the weakness in the housing market over March and April was entirely a quirk of holiday timing rather than something more fundamental,” ANZ said.

“We are currently very focused on the housing market, since a slump in house prices would pose a considerable threat to our outlook for the economy.”

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