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Clearance Rates Hold Firm Against COVID

The national clearance rate lifted at the weekend.

By Kanebridge News
Mon, Aug 2, 2021 10:23amGrey Clock 2 min

Despite Sydney being in the midst of its strictest COVID lockdown to date, the weekend auction market produced strong results for sellers.

July ended with yet another record Saturday offering for the month with all capitals reporting sharp increases in listings when compared to the previous weekend.

A total of 2203 homes were listed nationally on Saturday – up on last weekend’s 1944 and well ahead of the 919 auctioned over the same weekend last year.

The high listing numbers failed to slow the clearance rate with – 83.6% nationally – well ahead of the previous weekend’s 77.3% and the highest recorded since mid-April.

Sydney’s auction market bounced back despite lockdown woes with 623 auctions – up on last weekend’s 566. Although it is much lower than the record levels set earlier in the month.

The weekend clearance rate was also sharply higher at the weekend with the NSW capital recording 79.1% – up on last weekend’s 75.1% and higher than the 71.5% recorded over the same weekend last year.

Sydney recorded a median price of $1,700,661 for houses sold at auction at the weekend which was well above the $1,532,500 reported over the previous Saturday and 35.9% higher than the $1,251,000 recorded over the same weekend last year.

The Melbourne market saw more strong results with a 77.6% clearance rate at the weekend – sharply higher than last weekend’s 73.0%.

The strong results come in spite of a surge in listings to yet another monthly Saturday record for July – the Victorian capital recording 1264 homes listed to go under the hammer, well ahead of last weekend’s 1120.

Melbourne recorded a median price of $967,000 for houses sold at auction at the weekend which was higher than the $938,000 recorded over the previous weekend and 19.9% higher than the $806,750 recorded over the same weekend last year.

Data Powered by Dr Andrew Wilson of My Housing Market.


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Mortgage holders should brace themselves for more pain as the Reserve Bank of Australia board prepares to meet tomorrow for the first time this year.

Most economists and the major banks are predicting a rise of 25 basis points will be announced, although the Commonwealth Bank suggests that the RBA may take the unusual step of a 40 basis point rise to bring the interest rate up to a more conventional 3.5 percent. This would allow the RBA to step back from further rate rises for the next few months as it assesses the impact of tightening monetary policy on the economy.

The decision by the RBA board to make consecutive rate rises since April last year is an attempt to wrestle inflation down to a more manageable 3 or 4 percent. The Australian Bureau of Statistics reports that the inflation rate rose to 7.8 percent over the December quarter, the highest it has been since 1990, reflected in higher prices for food, fuel and construction.

Higher interest rates have coincided with falling home values, which Ray White chief economist Nerida Conisbee says are down 6.1 percent in capital cities since peaking in March 2022. The pain has been greatest in Sydney, where prices have dropped 10.8 percent since February last year. Melbourne and Canberra recorded similar, albeit smaller falls, while capitals like Adelaide, which saw property prices fall 1.8 percent, are less affected.

Although prices may continue to decline, Ms Conisbee (below) said there are signs the pace is slowing and that inflation has peaked.

“December inflation came in at 7.8 per cent with construction, travel and electricity costs being the biggest drivers. It is likely that we are now at peak,” Ms Conisbee said. 

“Many of the drivers of high prices are starting to be resolved. Shipping costs are now down almost 90 per cent from their October 2021 peak (as measured by the Baltic Dry Index), while crude oil prices have almost halved from March 2022. China is back open and international migration has started up again. 

“Even construction costs look like they are close to plateau. Importantly, US inflation has pulled back from its peak of 9.1 per cent in June to 6.5 per cent in December, with many of the drivers of inflation in this country similar to Australia.”

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