Auction rate currently

Hi all

How do you read the current increase in Auction rates particuarly in Sydney and Melbourne?

Do you see conditions to go back to a boom. I am listening to conflicted views in the market.

Canberra clearance last week was huge too (somewhere in late 80%).

Thank you

 

• Lack of stock
• Vendors being more realistic with price expectations
• Lower interest rates
• Change of wind direction
• Pent up demand

 

Adelaide auction rate was 81% last week, higher I have seen in months. I'm starting to regret not offering more for a property 3 months ago.... prices seem to be going up here.

 

• Lack of stock
• Lower interest rates
• Change of wind direction
• Pent up demand

thanks. I think the realistic price expectations is a main point here. meaning more likelihood of a sale happening, hence higher auction rates. pent up demand likely to drive up prices.

 

this week it was 71% according to domain, so holding up quite well. what is the situation with adelaide - I have tended to prevent myself investing there given it has tended to not have many jobs or industries/population around there. any thoughts on adelaide and how it may go in coming years?

 

Why do conditions have to go straight to boom?

Maybe just more stable market with a slight uplift.

Newspapers like boom or just as it helps to sell.

Although their are many conditions in between and as well as.

 

Well I wouldn't know what to say to you, I'm a newbie and looking for my PPOR so the investment part doesn't affect me at this point as this would be our first home. I'm just learning from doing research and reading this forum.

I have been looking for a property since March and I can tell you that prices seem to be going up around Plympton area.

 

You have to understand what these rates mean in context. e.g. in Sydney volumes are so low they're almost statistically useless at the moment (definitely in comparison to the last few years where volumes were double, triple, quadruple the current level). About 200 sales results week to week is absurdly low, and even though sales numbers have stayed around 200 or so we've been seeing clearance rates swing wildly, from the mid 60s to the high 70s. The same number of sales has yielded all sorts of clearance results, with big drops one week, and rapid rises the next. It means nothing, because volumes are that low.

Melbourne is a bit different, as their volumes have picked up. Sydney though needs to double its volumes before can take these results seriously. It's an odd situation; Sydney has rarely seen volumes this low. It means that even though sentiment seems to have improved, vendors are still terrified of taking a place to auction. Listings are also low, suggesting price improvements could be something based on low volume instead of any genuine improvement (but it's very hard to say).

Personally I'd be paying more attention to Melbourne in terms of any clues for improvement. Sydney is just too low to give a statistically meaningful result.

 

Adelaide tends to have sub-50 auctions a week. Its result is literally meaningless. It could be 90% one week and 10% the next week and it would mean nothing.

 

That's not true. It would mean hours of entertainment for Property Chat bulls and bears to argue over.

 

Grab popcorn

 

Fair points however I if clearance rates are improving, wouldnt it mean a positive sign in terms on us moving 'towards' higher listing since there is better sentiment?

Also, what metrics do you use to try to get some market indications? I try to look at days on market and try to stay across it but what other measures are important?

thanks

 

Vendors are reluctantly putting their property to auction (you can see the increasing number of properties which sell pre-auction). They are also being conditioned to put a lower reserve to make sure it does sell - pressure the vendor to lower expectations and pressure the buyer to get interest in 'baaaargains' - the more buyer interest the greater likelihood of preauction offer being acceptable or competition on the day if it goes the full campaign cycle.

Including dead cat bounce

 

No, most likely a slight over correction is bouncing up a little then likely to go sideways. No crystal ball of course but that's my guesstimate.

 

I have been contacted three times in the last 2 weeks by different agencies in regard to a property I own in Revesby (Hydrae street) , obviously interest has come back into the market. Will I sell?
Not a chance!

 

In the western Sydney established suburbs I am looking, mostly specufestors are circling & bidding the auctions. The type who are fast to grab & fast to run the exit. Their emotional vibe depends on how much extra debt they are recently allowed & what media is churning out, without having any concern to average joe’s struggle in real life.

 

I went to an auction in Thornbury today. Huge price for a 1 bedroom unit. Sold for 730k. Two bidders who seemed to be willing to pay whatever it takes. Definitely surprised how much sentiment has shifted so quickly and there seems to be no fears about broader economic issues.

 

Yeah & the likes of these have no idea what value for money means or they don’t wanna know at all.

 

I really want to agree as I am trying to upgrade my PPOR.
But whilst volumes are low, the buyers are there (in my area)... more people buying, generally means more people selling. 1 for 1 at the end of the day. I myself want to buy, and I wont list my place for sale until I buy.. maybe plenty of others in this position?

So really, there will always be a balance for PPOR buyers, wouldn't the important factors be how many FHB or investors are in the market because this is the only thing that pushes up demand? The rest is just trading a home for a home.

I am new to this so could be completely wrong?

What I think would be the best gauge on the markets around Australia is what investors (PPOR + atleast one other property) are going to do. Is there a way a Poll could be set up on PC asking somewhere along these lines. It could be confidential so people can put their egos away and honestly say what they would do. Poll example:
- Sydney & Melb Buy
- Sydney & Melb Hold and watch
- Sydney & Melb Sell
- Country areas B, H, S etc
- etc

 

Sydney dropped too far and too quickly from 2017. Definitely over corrected by early this year. I agree with you, bounce back up and stable or low growth.