Pete Wargent blogspot

CEO AllenWargent Property Buyers, & WargentAdvisory (institutional). 6 x finance author.

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Monday, 26 September 2016

Sting in the tail

Year-end approaches

Auction clearances limped over the line at the end last year as the regulator intervened in the smoking hot markets. 

That was particularly so in Sydney, where by the end of 2015 the odds of making a sale at auction were no better than a game of Two-up, without even the beer for compensation.

However, a couple of mid-year interest rate cuts have helped to breathe life back into the market of late.

Super Saturdays

Sydney's clearance rate was well up from 71.7 per cent the corresponding weekend last year to a dizzying 84.4 per cent, albeit on lower volumes, according to CoreLogic.

Even with the help of Super Saturday, the Eastern Suburbs has remained particularly short of stock, and prices are flying. 

The lack of willing sellers in the east is something of a conundrum - either the four year boom has exhausted the supply of vendors, or excessively high stamp duty is resulting in 'asset lock-in'.

Or maybe after all this time people have just forgotten that prices move in two directions. 

Melbourne's clearance rate of 79.1 per cent was also well up from the same weekend last year, when the clearance rate was 72.7 per cent. 

These two markets accounted for well over 2,000 of the 2,445 auctions held, so on a weighted average basis the clearance rate was strong at 78.3 per cent, well up from 69.7 per cent this time last year. 

This is also getting somewhat close to the record-breaking clearance rates seen in the frenzied middle of 2015.

Source: CoreLogic

This weekend was a pretty big test for the market.

Nest weekend won't be, however, due to far more important issues taking precedence in Melbourne at 1400 AEST next Saturday. 

Yes, ageing UK rocker Sting will be performing live at the MCG. 

Oh, and there's a game of footie as well. Go Swannies!