Auction markets cool over May as sellers surge

Sellers surge, is that the herd starting to rush for the exit?
Auction markets cool over May as sellers surge

 

RBA rate cut incoming

 

yeah gonna be interesting times, as FED might rate rise as well next week.

 

Recession is coming, rare in human history to have 25 years of good run without some sort of correction, this time we out of asset to sell and less people want to buy our raw minerals, interesting time ahead.

Best way to ride this wave is cash up, ready to go when blood are in the street

 

I think this is normal as we head into the Winter months. We might see a slight pick up come July 1 with the new Stamp duty changes but Spring should be the real indicator. If clearance rates stagnate or continue to decline then I think we can finally call the peak.

It's a 'wait and see' game now.

 

29.5% per cent higher in Sydney and 14.3% higher in Melbourne is significant. Is it normal for a jump in listings just before winter?

What is a lot more interesting is the clearance rates in Sydney and Melbourne:

Sydney May 2016: 69.4%
Sydney May 2017: 71.6%

Melbourne May 2016: 70.3%
Melbourne May 2017: 75.1%

I would say "the herd" is buying, not selling.

 

well you could say the FOMO herd is stil buying, whereas the Selling Herd is not holding back anymore waiting for higher prices and are seeing reasons to let go rather than sit and wait for higher prices like they did last year.

Was there a surge of selling before Perth market started crashing? IIRC there was a big rise in listings.

 

Honestly this is almost an exact replay of last year, even the stats show it. Then RBA want bang in May and bang in August and now we’re here again.

What’s going to happen this time? Its June and so far no bang.

 

Clearance rates can be a bit misleading to me, especially with things like a shift in strategy from auctioneers. A lot of emphasis seems to be put on this stat here in Oz, it's kind of weird. If the market slows down, agents might steer people away from the expense and hassle of an auction, taking only those places they're reasonably sure will sell to auction, because if a place doesn't sell you can have some pretty disappointed vendors. Maybe it's about managing expectations. I think there seems to be an increasing trend of people taking offers before auctions too or just after, and these seem to be counted as "clearing" auction. Was this always the case? I don't recall it being so.

On the RBA, they've really done all they can. I don't think they'll cut unless we go into recession because they need to have some ammo left. They're happy to let banks keep hiking rates so I certainly don't think they'll raise rates, but I also don't think we'll see a cut.

 

With Chinese slowdown and iron ore/coal prices collapsing, we might be on track for recession.
Current account deficit narrows but net exports likely to drag GDP growth down
[Capital Economics Paul Dales immediately revised down his first quarter GDP forecast from 0.3 per cent growth to a 0.5 per cent contraction ]

GDP figures for May should be quite telling.

 

Clearance rates are interesting when comparing the same time last year. As an overall number they are not particularly interesting but as a comparison they are.

 

yep. Buying herd is buying. Selling herd is selling. Putting it that way, it kind of sounds like a normal market. But Sydney is far from "normal" right now.

There was not a surge of selling in Perth. There was a surge in listings but there were few buyers, so the number of houses on market ballooned. Looking at the listings now, Perth would be considered a balanced market, it's just that it has reached equilibrium at a much lower level. Still, with everything I have looked at I would say there are very few good deals from what I have seen.

 

Reasons for the increased listings are the difference.. it's likely that Perth wasn't cashing out but out of work, which caused the drop... Sydney and Melbourne might just be taking their profits before the tide turns.

 

I agree. I've seen maybe 1 or 2 that looked ok... easier to find better value over East right now I think.