Housing demand defies gravity

Garry Shilson-Josling, Economist
(Australian Associated Press)


An odd thing is happening in the housing market – auction numbers are down compared with this time last year, but the numbers of homes being sold is up.

There were 3,367 homes put on the block last week, according to CoreLogic’s weekly update.

That was down by nearly 10 per cent from the corresponding week of last year.

But clearance rates tell a different story.

In the past week the clearance rate was 76.0 per cent, well up from the 60.1 per cent of auctions ending with a sale this time last year.

“Every capital city except Perth and Canberra are showing auction numbers to be lower than a year ago, while every capital has recorded a higher clearance rate compared with last year,” Corelogic said of its figures based on a preliminary analysis of the latest week’s sales data.

Despite the lower auction numbers, the much higher clearance rate means the number of completed sales was up about 14 per cent.

The main reason for that rise is the bellwether Sydney market, where auction numbers were down slightly, at 1,236 compared with 1,306 a year earlier, but clearance rate was much higher at 81.9 per cent compared with 56.2 per cent.

That implies a massive 38 per cent rise in completed sales in Sydney.

Even so, the rest of the country seems to be holding up – the average clearance rate outside Sydney for the latest week is 72.7 per cent, compared with 62.2 per cent a year before.

So although the number of sales outside Sydney fell by 12.1 per cent, from 2,423 to 2,131, the higher clearance rate meant the number of sales was still up slightly, probably by about three per cent.

In fact, no capital appears to have experienced a significant fall in completed sales, with Canberra the other standout as its sales – about two per cent of the national total – are up by about 60 per cent.

The underlying strength of the market is being reflected in price movements.

On average among the five mainland state capitals, prices were down by 0.4 per cent last week, extending the 0.2 per cent fall reported for the week before.

But prices are still up by 9.3 per cent from a year ago and the current seasonal pre-Christmas dip has arrived later, and so far is shallower, than in each of the previous three years.


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