Auctioneers kept busy as confidence returns

Bidders have pushed the price of homes sold at auction higher as the recovering market energises.

Auctioneer Charles Baynie auctions a property in Bond Street in Mosman on Saturday.

Bidders have helped drive the price of homes sold at auction higher as strong clearance rates through the busiest week of the year energise the recovering market.

It was a busy week for the nation’s property auctioneers, with anticipation of the racing season helping to push the number of properties being sold under the hammer up by a third week-on-week. Property researcher CoreLogic’s preliminary data showed 75.3 per cent of auctions cleared.

Melbourne sellers hoping to avoid competition with the Spring Racing Carnival created the last super Saturday of the year, with winning bids placed on an estimated 77.1 per cent of 1,528 available properties. Sydney once again recorded the highest preliminary clearance rate in the country 79.7 per cent from 761 auctions.

The continued strength in auction clearances figures is influencing bidder decisions and prices. Data provided to The Australian by My Housing Market chief economist Andrew Wilson shows the median prices of homes sold at auction is rising.

The annual increase median prices in Sydney and Melbourne rose for the second month in a row, with October figures up 3.7 per cent and 3.8 per cent in each respective city. Demand for established units is helping drive unit prices in Melbourne, up 6.1 per cent.

Median auction prices are also well ahead of the general market. While September price data placed Sydney’s market median at $805,424, houses at auction achieved a $1,322,500 median — a difference of more than $500,000. The difference is less pronounced in Melbourne, where reactions reached a median $920,000 compared to the $634,913 price tag in the general market.

Mr Wilson said an important consideration in the data is a mix of property, with auctions skewed towards premium and competitive properties. Nonetheless, he said the figures were not surprising.

“There is no doubt that momentum is rising in terms of pricing,” he said. “The last three out of four weekends in Sydney saw clearances above 80 per cent which is always a good sign for price growth. Melbourne is doing well too.”

Economists expect another rise in median prices when CoreLogic deliver October house price data on Friday.

In the rest of the market, more than half of all properties available in Adelaide (68 per cent) and Canberra (55.6 per cent) sold at auction last week, while Brisbane and Perth achieved a rate of 46.6 per cent and 43.5 per cent respectively.

CoreLogic’s auction commentator Kevin Brogan said the strong result from super Saturday volumes showed buyers were active.

“There was definitely a feeling that an increasing number of auctions was going to test the market,” he said.

“The clearance rates are actually higher than last week, so that does show there is a bit of resilience and a bit of depth to that to that latent demand.

With 10 weeks until Christmas, Ray White Victoria’s chief auctioneer Matthew Condon said demand and supply numbers are on the rise.

“On the ground, buyer confidence continues to remain high, with the number of bidders actively completing to secure a property with the view of settling and moving in prior to Christmas,” Mr Condon said.