More strong auction results as buyer demand ramps up

Capital cities recorded another round of strong auctions results last week. 

According to data from property research firm CoreLogic, 1,587 capital city homes went under the hammer in the week ending 7 March, with preliminary clearance rates coming in at 84.5 per cent.

While the final results have yet to come in, this looks to be an improvement on last week, which returned a preliminary clearance rate of 82 per cent (later revised down to 79.3 per cent).

The major markets are enjoying an upswing, with Melbourne posting a preliminary clearance rate of 81 per cent across 477 auctions, and Sydney posting an 86.7 per cent preliminary clearance rate across 812 auctions.

Smaller auction markets also continue to show strong results. Canberra led the way with 91.5 per cent of auctions returning a sold result, followed by Brisbane (82% per cent), Perth (82 per cent) and Adelaide (81.7 per cent).

CoreLogic notes that volumes were much lower than the previous week, partly due to public holidays. This slowdown in market activity was most pronounced in Melbourne, which held 822 fewer auctions than in the previous week.

Property prices continue to climb

After enduring a slight dip in prices last year, the property market seems to have returned to form in 2021. CoreLogic found prices rose by 2.1 per cent in February, marking the biggest monthly increase in 17 years.

Properties on the higher end of the market are benefiting most from the current upswing. Over February, the top 25% of properties across capital cities (priced $960,000 or above) climbed 2.7 per cent in value.

Meanwhile, mid-tier properties increased 1.5 per cent, and properties on the lower end of the market (priced under $497,000) increased 1.2 per cent.

“Melbourne and Sydney show this cyclical pattern fairly consistently, where the most expensive parts of the housing market see deeper declines in downswing periods, and higher highs during an upswing phase,” said CoreLogic head of residential research Eliza Owen.

“Similarly, the low end of the housing market may appear subdued while the rest of the market is booming, but holds its value relatively well during downturns.”

Owen also said the current lift in prices among lower-tier properties might be due to the large numbers of first home buyers entering the market, though this could taper off over the year as government incentives are wound down.

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