Despite interest rates continuing to rise, buyers are now starting to return to the market after having “waited long enough” for prices to fall according to an expert.
Apollo Auctions Director Justin Nickerson said that during February, there was a significant improvement in the overall auction clearance rate now that the holiday period is over and bidders appear to have a sense of urgency that they didn’t have before.
Mr Nickerson said, “Our auction clearance rate increased to a very healthy 60.4 per cent in February – up from 48 per cent during December and January.”
Strong results in Sydney
“Part of the reason for the uplift was improving results in Sydney, where its auction clearance rate jumped from about 21 per cent to 62.50 per cent over the past two periods.”
Around the country, auction clearance rates have been slowly increasing along with the number of registered bidders and attendees.
Mr Nickerson said he has seen results improve in most cities with the Gold Coast and Melbourne also seeing more interest from buyers.
Melbourne achieved an auction clearance rate of 68.4 per cent over the month as well as reports of rising buyer volumes and competition at auction he said.
“Although the headlines have read as negative, the reality is that buyer volumes at opens are on the rise and levels of competition are improving in Melbourne.”
“There is clearly an overall more positive mindset with bidders at auction given our average number of attendees increased in February and the average number of bidders per auction jumped to 4.4 as well.”
“Buyers in Melbourne are now getting to the point where they have waited too long for the market to fall, and each interest rate rise is harming their options just as badly.”
February auction results
Brisbane and Gold Coast start the year well
The Brisbane auction market has had a remarkable start to the year with all of the key metrics up in early 2023 from the end of 2022, Mr Nickerson said.
He said, “Most encouragingly, the average bidders registered per auction has lifted with a large percentage of those participating in the auction action.”
The Gold Coast also saw an improvement in February with its rate up from 44.5 per cent to 64.5 per cent over the same timeframe.
The Gold Coast continues to attract more buyers than sellers, attributing to clearance rates hovering around 65 per cent and a 14-day post-auction clearance rate above 90 per cent.
Mr Nickerson said, “Buyers have more to choose from than they did 12 months ago, so, it’s fair to say that if sellers are in line with market values, the Gold Coast is looking at even higher clearance rates moving forward.”
In Perth, the city market continues to be impacted by low stock levels.
There were 922 reported sales in the past week, eating into crucial stock and helping to keep the market healthy as well as reasonably oblivious to the continuous sequence of rate rises, Mr Nickerson said.
“When comparing stock levels to a year ago, the city is 8.3 per cent lower than the same period last year, according to REIWA Statistics which, when put in real terms, means there are 655 fewer properties to choose from, across the entire city.”
Article source: Queensland Property Investor