As we headed into the new financial year, some property markets remained relatively flat, but a few key hubs had a bumper July.
The stamp duty exemptions that came into effect in Victoria and NSW on July 1 were a major driver of market activity. Sydney and Melbourne both saw very high price growth, which I think can be largely attributed to an influx of first home buyers, who may have held off buying in June in order to take advantage of the new regulations.
It made for some impressive auction results over the month. Here’s my summary of major markets in July:
|Average clearance rate: 75%||Average number of auctions per weekend: 700|
Melbourne was a strong performer in July, with property prices increasing by a massive 3.1%, according to CoreLogic data. That lifted the annual rate of growth to 15.9%, which is huge. Those growth rates are backed up by the highest clearance rates out of all capital cities, ranging from 72% – 77% over the month.
Melbourne is still very much a first home owners market, and I think that’s where a lot of this growth may be coming from. There are still plenty of properties under the new limit for stamp duty exemptions or discounts, which I think goes a long way to explaining why we saw such a boom after July 1.
|Average clearance rate: 71%||Average number of auctions per weekend: 535|
The Sydney market remained strong over July, with clearance rates hovering between 70% – 73% all month. There was also no downturn in demand, with prices rising 1.4% in the month, and 12.4% for the year, which, while not as high as the Melboune result, is still a strong result. Some analysts were expecting the property bubble to burst in the Sydney market around July, but in actual fact, prices are still on the rise, and may not plateau for some time yet.
Like Melbourne, Sydney’s strong market this month was driven in part by first home buyers who were keen to take advantage of the new stamp duty exemption.
|Average clearance rate: 65%||Average number of auctions per weekend: 54|
At the moment, the Adelaide market is best described as “lukewarm”. The average clearance rate dropped from 74% last month to 65% in July and average listings fell from 66 last month to 54 this month.
The drop in listings could suggest sellers are turning to private sales, which as I said last month, certainly isn’t the mark of a growing market. Even so, I’m cautiously optimistic about the Adelaide market’s future prospects.
|Average clearance rate: 56%||Average number of auctions per weekend: 82|
Brisbane is another relatively underwhelming market. This month, the average clearance rate was up to 56% from 49% last month, but the number of auctions was down from 94 in June.
There’s a high supply of units in Brisbane, which will keep prices tame. Overall, I would expect the market to remain steady at its current level, but there aren’t too many growth prospects on the near horizon.
|Average clearance rate: 73%||Average number of auctions per weekend: 44|
Canberra was relatively strong this month, with an average clearance rate of 73%, up from 65% in June. The number of auctions did dip down from an average of 51 last month, which might suggest a reduction in supply.
It’s still very much an investor driven market in Canberra with strong rent figures, and I wouldn’t be surprised to see price growth in the coming months.