What is the significance of auction clearance rates

I agree with you, as long as other indicators and data corroborate each other. Otherwise isolating 1 indicator and making decisions based on that is very dangerous. imo.

 

Fair enough, culturally it's still a foreign method of selling there IMO but over time it has become more common. I think for median priced stuff its a turn off for prospective purchasers as problems like termites etc are such a problem in Brisbane.

 

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So going by the stats, the period which property actually went backwards (which sold at auction, being a very small sample of all property sold), was limited to a very short period. If this was the case, those who would have been most affected would have been those involved in flips who bought and sold in this very short timeframe, even so, prices retracted by only a few % over a much shorter period than the periods of growth.

 

You'd expect that to be the case in a system where market regulators target permanent/ongoing price inflation. Though as debt levels increase relative to incomes this target will become more difficult to achieve.

 

I believe the significance is to human psychology.
I think people get scared when clearance rates drop.

 

I would say 50% the battle is to understand that psychology of the crowd/herd and use it your advantage in almost every way possible. It's really a high stakes poker game. Experienced/knowledgeable investors will generally end with good-great results.

Imagine playing poker with quite often a group of people who don't even realise 1. They are in the game and 2. don't understand the rules.

 

That's useful to know