Auctions up and running
Auction markets got off to a surprisingly strong start in Sydney this year, with preliminary auction clearance rates this week pushing close to 80 per cent.
In Melbourne the preliminary clearance rate was somewhat more benign at 67.9 per cent, according to Cotality.
Source: Cotality
It seems that the take-up for the 5 per cent deposit guarantee has provisionally been much higher than Treasury forecasts (this often seems to be the way for such government schemes and grants).
While these figures may be for approvals rather than purchases, it seems likely that this will translate into a spike in demand for entry-level properties.
The bottom end of the market continuing to outperform appears to be borne out in the Domain figures, with the median auction price for units hitting new highs in Sydney.
Source: Domain
Asking prices for units in Melbourne are also up by around 10 per cent from a year earlier.
Market conniptions
Reading the headlines over this past week you'd be forgiven for thinking that we were in the midst of a stock market panic.
In reality, the Dow Jones is up by +12 per cent over the past year and closed out the week at above 50,000 for the first time in history.
Although there were a couple of blips along the way - including, most notably, through the pandemic - it's been a hell of a run from 6,600 in March 2009 to above 50,000 today.
Granted, there has been some fear and volatility over recent days, in part because recent market gains have been so concentrated around some extremely hot tech companies.
Meanwhile, the expected AI capital expenditure boom has exploded to breath-taking heights in 2026.
One competitive advantage for the US is that - while European governments announce small-scale investment plans in the artificial intelligence space - America has a ready-made army of developers who can pivot from 'Web3' into the new hot sector of AI.
Although investors have been understandably twitchy about sky-high valuations and the potential for a more 'hawkish' stance from the new Federal Reserve Chairman, they can take some comfort in the fact the inflationary pulse in the US has been fading.
As such, the 'Fed put' can come into play if things do get hairy out there.
Should be an interesting week ahead.
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