Sydney, which had recorded double-digit falls in property prices since their mid-2017 peak, saw a preliminary clearance rate of 78.2 per cent for the weekend on Sunday, 7 July, according to CoreLogic figures.
That was up more than half on the same week last year, when just 50.1 per cent of all properties taken to auction achieved a sale.
Melbourne also saw a strong spike over the period, with 70.3 per cent of properties selling last week, compared with only 55.1 per cent at the same time last year.
The two cities by far make up the bulk of Australia’s property auctions.
Other capital cities saw more modest results, with the exception of Adelaide, which also recorded a noticeable increase in its auction clearance rate year-on-year:
- Adelaide: 66.7 per cent last week (compared to 54.7 per cent at the same time last year)
- Brisbane: 40.6 per cent (compared to 42.7 per cent)
- Canberra: 46.8 per cent (compared to 63.0 per cent)
- Perth: 25.0 per cent (compared to 27.8 per cent)
Data is not provided for Hobart and Darwin because of their small size.
According to CoreLogic, the initial weekly results on a Monday tend to be slightly lower when the full results are tallied and made available on a Thursday.
Nevertheless, the property data firm noted that combined capital city clearance rates have remained above the 60 per cent for four consecutive weeks now (at 68.9 per cent last week) — the first four full weeks since the Reserve Bank began cutting interest rates on 4 June.
Aussies hold off selling property
Another factor likely contributing to higher clearance rates comes down to supply and demand.
The volume of properties listed for sale across the nation’s capital cities has dropped dramatically, CoreLogic stats reveal — most by double-digit percentages over the past 12 months.
Sydney and Melbourne have recorded the biggest falls in the number of new property listings, down by 31.0 per cent and 30.8 per cent, respectively.
The volume of new listings is also well down in Brisbane (21.7 per cent), Perth (19.5 per cent) and Canberra (10.0 per cent).
Adelaide and Hobart have also seen the fewer new listings hit the market over the past year, easing by 9.7 per cent and 9.4 per cent, respectively.
Only in Darwin have the number of new listings increased, up by 9.3 per cent since this time last year.
APRA eases lending restrictions
Another boost for the nation’s property markets is yet to flow through.
In May, banking regulator the Australian Prudential Regulation Authority (APRA) began consulting with lenders on whether it should ease restrictions it had placed on them when assessing eligibility for loans, particularly investor mortgages.
Those changes have now taken effect, with lenders no longer required to assume its 7 per cent interest floor when assessing loan serviceability.
Instead, lenders will be able to set their own minimum criteria, but will have to allow a buffer of at least 2.5 per cent above the loan’s interest rate when calculating whether a borrower can afford the loan.
Property owners not celebrating yet
While these movements suggest the nation’s embattled property market may be stabilising, property — and the nation’s economy, given the amount of wealth and confidence tied to it — are not out of the woods just yet.
Separate figures from CoreLogic show that less properties are achieving a profit when re-sold within the same quarter than at any time in March 2013.
Its Pain and Gain Report, which tracks the proportion of properties that are re-sold in such a short time frame for whatever reason, found that in the March 2019 quarter, 87.9 per cent of resales made a gross profit.
That was the lowest result in six years, and was down on both the previous quarter (89.5 per cent in December 2018) and the same period a year ago (91.0 per cent in March 2018).
That meant that while $14.3 billion was generated in gross profits over the three-month period, $486.8 million in losses was also realised nationwide.
“[The] highest share of losses nationally [was] seen in Perth (24.8 per cent) and Sydney (19.9 per cent),” it said.
Investors continue to account for a greater share of the losses than owner-occupiers, CoreLogic said.