Consumer confidence has returned to the property market, resulting in higher than normal auction clearance rates.
According to CoreLogic, the preliminary national auction clearance rate from the weekend came in at a buoyant 76.2 per cent, which is well up of the 62.8 per cent from the same time last year.
In Adelaide the clearance rate hit 86.2 per cent, while in Sydney it tipped 80.4 per cent.
CoreLogic Research Director Tim Lawless said the auction market had turned a large corner in a short space of time.
“The newfound strength in auction market is a radical turnaround from the December results last year, where the preliminary capital city clearance rate fell to the mid 60 per cent range while final clearance rates dropped to the mid 50 per cent level,” he said.
First National Real Estate Head of Growth and Chief Auctioneer, Matthew Harvey, said the new year had brought with it a new outlook, particularly from buyers.
“This is a reflection of consumer confidence,” Mr Harvey said.
“Inflation figures are coming down, and are better than what we expected, there’s confidence out there and there’s talk about interest rate reductions.
“Some economists are saying one interest rate reduction, but I heard one says there’s potentially going to be three this year.
“And what that does is it creates confidence in the marketplace.”
Mr Harvey, who is based in Sydney, said the high clearance rates could ease a fraction in the coming weeks as more properties go to auction.
“Those figures may subside a little bit,” he said.
“I’d suggest the week of the 17th and the 24th of February are going to be bigger auction weekends.
“But what we’re seeing now is people deciding, ‘Let’s get in now before interest rates come back down and the market takes off’.”
Apollo Auctions Director, Justin Nickerson, said there was a two-speed auction market at the moment with some properties attracting one or two buyers, while others created much more competition.
He said the location and quality of the property was having a direct bearing on how much competition was created.
But he said with listings still quite low, properties were selling.
“We’re still, at the moment, facing very low listing numbers so that competition is being funnelled through only a few available options,” Mr Nickerson said.
“In some cases that’s creating really strong and heated competition.”
Mr Nickerson said auction bookings for March were strong, but he didn’t think more supply would drastically change the market.
“I don’t think it’s going to dramatically change the landscape because I don’t think it will go from buyers having two available options to having 10,” he said.
“They might go from having two available auctions to having three or four, but there still won’t be tons of choice there.”
Mr Harvey said agents looking to capitalise on conditions right now needed to prospect hard and focus on offering sound advice to potential clients.
“We’ve always taught our agents that it’s not a transactional business anymore,” he said.
“You’re there to be the person that provides information, provides updates and you’re supposed to be the go-to person within your industry.”