The traditional spring selling season has picked up momentum with auctions across the major markets of Sydney and Melbourne seeing a surge in clearances.
The confidence boost across Australia's east-coast capitals after the May federal election, rate cuts and a sense that banks are easing serviceability measures instilled by regulator APRA — combined with spring — has continued to breathe life into the housing market.
According to preliminary figures from data provider Corelogic, nationally the clearance rate was 74 per cent, an increase on last week’s final result of 72.8 per cent.
High clearance rates this week were maintained even as the number of listings rose more than one fifth to near 2,000 homes listed for auction nationally.
Sydney was at 76.6 per cent and Melbourne at 77.8 per cent. Last week's final clearance rate was 75.7 per cent, and remained above 80 per cent in Sydney.
Elsewhere, Canberra was the best-performing of the smaller auction markets, with a preliminary auction clearance rate this week of 65.3 per cent on Corelogic figures. Adelaide followed closely with 59.2 per cent of homes selling at auction. Brisbane achieved a 52.7 per cent rate.
While volumes have been steadily ticking up over the past month they are still down on the previous year, when 400 more properties were taken to auction.
Sydney returned a preliminary auction clearance rate of 76.6 per cent as volumes increased across the city.
There were 647 homes taken to auction, up on the 585 homes auctioned the week prior when 76 per cent sold. Last year, a higher 851 Sydney homes were auctioned returning a 51.1 per cent success rate.
Ryde was the strongest performing region at 85.2 per cent from 36 auctions, followed by the inner south west at 83.3 per cent and the eastern suburbs at 81.8 per cent.
In Melbourne, 1,022 homes were taken to auction, with 77.8 per cent sold, up on the 74.5 per cent final auction clearance last week when volumes were lower at 826.
At the same time last year, 53.8 per cent of the 1,161 Melbourne homes taken to auction were sold.
Melbourne's outer east was the strongest performing region at 92.8 per cent from 77 auctions, followed by the inner east at 84.8 per cent.
Auction volumes are anticipated to drop next weekend across Melbourne to avoid the clash with the AFL grand final.
Across the individual property types, the last five weeks has seen houses consistently outperformed units in terms of clearance rate with 74.9 per cent of houses selling at auction this week, while across the unit market a lower 71.2 per cent preliminary clearance rate was recorded.
Concerns remain that the strong market will not continue and that wider concerns about the weak economy are holding listings back.
Many analysts have questioned the ability of the housing market to stimulate an otherwise anaemic economy.
According to analysis by global investment bank Morgan Stanley, residential property is dragging along market bottom rather than set for a rebound that will reinvigorate the economy.
The bank has warned that only through fiscal expansion driving employment and salary growth will sustained economic recovery will be generated, rather than re-leveraging household debt.
Structural headwinds in the property sector, such as low investor activity and sellers’ crystallising losses from the downturn, are also slowing recovery.
Clearance rates as also expected to retract toward the end of the spring selling season as they do most years, which could dampen the current upswing in optimism.
