Auction clearance rates stable
As always, the following in no way constitutes financial advice and no warranty is offered as to its accuracy or validity. The reader is to make their own inquiries prior to making any decisions.
As expected, there were no surprises from the RBA. Keeping the base funds rate at 1.5% for another month.
For the whole of the Melbourne Metro area clearance rates remained very consistent; The published clearance rates (PCR) for the weekend was 52%. Another increase of 2% again. Reported Auctions were 820, with 429 reported as sold and 391 passed in, and 55 either withdrawn or postponed. Of those reported, 541 where houses again with a 50% clearance rate, 267 apartments with a 58% clearance rate and 12 others being registered as land sales.
Looking deeper into the numbers over the weekend there were 1,246 Auctions scheduled with results for 820, or 65% reported. Without counting any unreported results as sold, that would show a stable clearance rate of 34%. This is showing a very consistent trend on all numbers which is good.
Many of the areas have wide variances week to week in clearance rates with areas fluctuating between single digit clearance rates to the high 60%’s week to week. Buyers and Sellers are still struggling to finding stability for particular price points and demographics.
The reported outcomes for the areas are as follows;
- Albert Park – Middle Park – Port Melbourne – St Kilda West – South Melbourne; 40% PCR
- Southbank – Melbourne; 50% PCR
- Werribee – Werribee South – Wyndham Vale – Hoppers Crossing; 0% PCR (6 scheduled – 1 reported, passed in)
- Glen Iris – Armadale – Hawthorn – Hawthorn East; 53% PCR
- Seaholme – Williamstown – Newport; 62% PCR
The Westpacweekly PDF roundup for November 12th has discussed Australian housing finance approvals and their continued softening in September. The value of loans was considerably weaker, in particular for owner occupier loans which have dropped 4.2% September to be down 8% in the space of two months, however, the headline number of owner-occupier loans only declined 1%, in line with the consensus forecast. Existing refinancing also only declined a mild 0.5%for the month. Potentially this could be signaling a plateauing of finance rejections and investor pullback, which was hit fairly hard after the Banking Royal Commission.
Politicians are also starting to become focused on the long term trend, with the Australian Financial Review reporting the Australian Treasure Josh directly addressed liquidity “I would encourage the banks when it comes to lending, in particular for small business, make sure you get the balance right, keep the books open and don’t lose sight of the broader public good,” he said. “We all know the royal commission has brought into focus the issues of responsible lending and examples of misconduct. While both issues are important, I do see them to some extent as separate, with different responses required.”
Scheduled Auctions for this coming Saturday are also increasing across the board with the Port Phillip area increasing from 17 to 22 (20%+) for example. I believe (just a guess) that in the coming weeks as we lead into the last few weeks of 2018, the clearance rates should increase marginally, possibly into the high 50%’s PCR as buyers run out of time to buy something before the Christmas break.
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