Investors driving auction clearance rates; Prices rise in all capital cities

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First spring auction market shows investor-driven spike in clearance rates

Real estate watchers estimate investors made up approximately 60 percent of sales in Sydney and 40 percent in Melbourne over the weekend. Clearance rates in Sydney topped 83 per cent, with a 75 per cent clearance rate in Melbourne. Australia's capitals hosted 1,692 listed auctions, compared to 1,054 for the same week last year, indicating that the rising clearance rate reflects robust demand and not shrinking supply. About half of auctions cleared in Brisbane, Adelaide reached 70 per cent, Canberra cleared 56 per cent and Perth at 27 per cent. Read the full story here.

Prices rise in all capital cities for first time since GFC

For the first time since the global financial crisis, quarterly home values rose in each of Australia's capital cities, according to the annual report of property firm McGrath. CEO John McGrath predicts southeast Queensland will double the growth of Sydney over the next three to five years, and that the prestige market will begin a period of exceptional growth, driven by investor demand, particularly from China with India close behind. Read the full story here.

Market fundamentals point to an inevitable fall in home values … eventually

A fall in housing prices in inevitable, but calling the market's top is a brutal guessing game, notes Peter Martin, economics editor for The Age. Fundamentally, home prices cannot continue to outpace population growth and real wage growth in places like Sydney and Melbourne forever, even with the introduction of capital from foreign buyers and historically-low interest rates. And leaders from both the Reserve Bank of Australia and independent economists have sounded notes of caution. “much of our housing boom isn't real,” Martin writes. “It's inflating prices and swapping the ownership of homes rather than making more.” Read the full story here.

Units grow faster than houses in North Adelaide

North Adelaide unit price growth has outpaced house value increases more than two to one over the last five years, according to RP Data figures. Units have appreciated by 40 percent to $570,000 since 2009, compared to 17 per cent for homes. Median home prices remain much more expensive in North Adelaide – $915,000 on average. Local real estate agents attribute growth to the $535 million investment into the Adelaide Oval stadium, as well as low interest rates. Read the full story here.

Melbourne setting the mark for apartment sales this year

RP Data shows the 1300 units sold in Melbourne’s CBD this year to May hold the mark as the largest number of apartments changing hands in Australia, followed by Queensland’s Surfers Paradise and the Gold Coast suburb of Southport. But the robust market for Melbourne's units masks some weaknesses. Units in Melbourne sell for a third less on average than Sydney's units, which may reflect the quality of new unit construction. Beach communities appear to be appreciating faster than other areas, even in Sydney's core. Read the full story here.

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