For the first time in 12 months the May month saw house prices decline by just under 2%. However the decrease is seasonal and in line with previous trends for the same periods in recent years, other contributing factors have added to this including overall consumer confidence and recent lower auction clearance rates.
This said despite the last few weekends of June reporting lowered clearance rates, overall nationally auction clearance rates across Australia have been balanced. The auction method this year has been more favoured with the first 6 months of 2014 compared to the first 6 months of 2013 showing a 40% increase in auctions and if we compare this against our numbers with financial year 2014 coming to a close, Co-Directors, Rocky Bartolotto and Rob Trovato of Property Auction Services have seen a huge shift with auction volume closing up 80% compared to financial year 2013.
Across the nation, Sydney lead the way with the strongest auction clearance rates. Recent figures obtained by RP Data put Sydney ahead once more when it comes to market rises with 97% of properties that sold in the March quarter selling for a profit. Perth and Melbourne were not very far behind recording results about 90%.
A recent example of solid growth was displayed with the sale of 1/146 Mullens Street, Rozelle sold on the 27th June for $990,000. Belle Property Balmain agent Benjamin Martin said the final result reflected a 24% growth from the purchase just 3 years ago. Sydney’s Inner West market this month stood out from the rest as it has done for the majority of 2014 continuing to be one of the strongest performing regions with clearance rates. Director of Day & Hodgson Real Estate Maria Hodgson puts this down to existing owners who purchased 5-6 years ago being able to upgrade to bigger homes after witnessing the strong growth the region has achieved over the years, and as a result the properties they are selling are favouring investors coming back into the market.
Taking a look at auctions for June across all Sydney regions our team recorded a 74% clearance (8% higher from June 2013). The activity we are witnessing at auction reflects a strong market though one that has levelled out over the last 8 weeks to a nominal level. It will likely remain this way for the rest of the year and with an upcoming RBA meeting it is likely that interest rates will remain unchanged.
Looking ahead usual patterns would indicate the market softens over the coming months due to stock levels decreasing, however we have seen a number of bookings that potentially show a stronger auction July market ahead with early figures showing an increase from auctions in July 2013. Stock levels will increase as we head into the warmer months but my tip to anyone thinking of selling who is holding off would be to do this within the next 8 weeks as this is an ideal time to capitalise on a stronger result with lower stock levels/competition in the market.
Rocky Bartolotto is a Director and Chief Auctioneer at Property Auction Services.
Property Auction Services guarantee to provide and implement a professional process for our valued clients choosing to sell through auction. With over a decade of experience calling auctions across all Sydney regions, we are confident our auctioneers will provide you with a service that is unrivalled and unique to each individual requests. For more details visit www.auctionservices.net.au.