Property prices: What auction clearance rates tell you about the market

Already a subscriber?In property-obsessed Australia, knowing when to buy or sell a home is often the difference between getting an average or great result at auction, with clearance rates one key indicator of the market’s overall health.

Buyers get more transparency as to where other bidders are at during an auction, says Astrid Joarder.Auctions are most popular as a sale method for more valuable property in Sydney and Melbourne that’s likely to attract strong interest and multiple bidders, while outside the major capital cities apartments and houses are more commonly sold by private treaty.An auction clearance rate above 70 per cent indicates a sellers market whereas a rate below 60 per cent suggests a buyers market .

“But a sustained period of lower clearance rates generally means it’s a buyers’ market where you may get sharper prices.”After the Reserve Bank of Australia embarked on the steepest cycle of interest rates rises in a generation from May 2022, preliminary national clearance rates slumped to aThe rate was the weakest since April 2020 at the peak of the pandemic panic that smashed confidence around asset valuations and the economic outlook.

According to Christopher, the main drivers of property prices are interest rates, employment levels, wages growth, population growth and overall economic growth. Clearance rates are a symptom of the relative strength of the market and these drivers. According to Collier, factors like the time of year or public holidays may shift clearance rates over the short term, while the volume of properties going to auction over any one weekend is also an important influence on clearance rates.

United States United States Latest News, United States United States Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Property investment: Property investor demand to ease if rates riseHaving recently returned to the housing market in droves – outpacing owner-occupiers – investors could face a potential slowdown in capital gains.
Source: FinancialReview - 🏆 2. / 90 Read more »

Melbourne property prices: Melbourne property market is due for a comebackOxford Economics predicts the median Melbourne house price will grow 21 per cent over the next three years, outpacing Sydney’s forecast 18 per cent expected growth.
Source: FinancialReview - 🏆 2. / 90 Read more »

Using superannuation for property investing: Surge in self-managed super fund property investmentA growing number of property investors who have “tapped out” their personal borrowing capacity are using their self-managed super funds to borrow more, advisers say.
Source: FinancialReview - 🏆 2. / 90 Read more »