June property market wrap up: capital cities blowing hot and cold

June property market wrap up: capital cities blowing hot and cold

The beginning of winter is traditionally the time that the property market begins to slow down. But this month, between the big bank levy, interest rate adjustments from lenders, and new stamp duty regulations in NSW and Victoria, the property market has been an interesting place to be.

Here’s a wrap up of what Australia’s major markets looked like in June:

Sydney

Average clearance rate: 70% Average number of auctions per weekend: 683

The Sydney market seems to have been on a downward trend for the past couple of months, but there are a few interesting factors at play here.

The average number of auctions listed dropped sharply, from 735 to 683 per weekend. Part of this is the Queen’s Birthday long weekend dragging the average down, plus we expect to see auction results drop at the beginning of winter.

Having said that, if you look at the figures year in year, this June the number of auctions have remained relatively strong. This is potentially because people suspect the Sydney market has reached its peak, and sellers want to lock in a sale before prices start dropping.

On the other hand, one reason for the low clearance rate – which dropped from 71.6% in May to an average 70% in June – could be that buyers are holding off until the new rules around Stamp Duty come into effect on July 1. I suspect we’ll see the clearance rate bounce back up after those changes, and it will be interesting to see what effect it has on listings.

Melbourne

Average clearance rate: 76% Average number of auctions per weekend: 802

The Melbourne market continued to have relatively strong numbers in June, with more auctions listed and a higher clearance rate than even Sydney. A high average of 802 properties went under the hammer each weekend in June, with an average clearance rate of 76% – up slightly from last month’s 75.1%.

In comparison with Sydney, which may have finally reached its peak, the Melbourne market still has some growing to do in the coming years. June’s strong results despite the recent crackdown from APRA suggests to me that the Melbourne market is mainly owner-occupiers, and these sales are likely to continue, as there’s plenty of space in Melbourne for the market to expand outwards into cheaper areas.

Adelaide

Average clearance rate: 74% Average number of auctions per weekend: 66

The Adelaide market was interesting this month. Although there was a small number of listings, which makes it hard to properly identify trends, the clearance rate was quite high – almost on par with Melbourne. That’s encouraging, and certainly not indicative of a struggling market.

It’s probably too early to say with any confidence that this is an upturn for the Adelaide market, but if clearance rates like this hold up, I can see more sellers deciding to go to auction, and in turn, the market may begin to pick up. Adelaide may be a good place to keep an eye on in the coming months.

Brisbane

Average clearance rate: 49% Average number of auctions per weekend: 94

There was a small amount of properties up for auction in Brisbane during June, and a low clearance rate. This combination reflects a struggling market.

The low number of listings could mean that sellers are turning to private sales, which in itself is another indication of a low market, because it suggests properties going to auction may not be meeting their reserve prices.

In the future, I think Brisbane will remain pretty flat – houses may hold steady, but an oversupply of apartments doesn’t bode well for that section of the market.

Canberra

Average clearance rate: 65% Average number of auctions per weekend: 51

Like Brisbane and Perth, Canberra recorded a pretty small number of auctions over June, making it hard to pick a trend. Unlike Brisbane, however, the 65% clearance rate recorded in Canberra indicates a relatively stable market.

Canberra’s private sale figures are pretty good at the moment, and the rental market is also strong. If that keeps up, investor interest in the city may increase, which will help bolster the market further, and e may see an increase in auctions and clearance rates.

June property market wrap up: capital cities blowing hot and cold was last modified: June 30, 2017 by Steve Jovcevski

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