Property buyers across Australia are pulling back amid concerns of rising interest rates and a renewed threat of a global economic slowdown.
The latest figures from RP Data show that the number of properties sold in auctions has fallen significantly over recent weeks.
Melbourne recorded a 69.4% clearance rate last week – a far cry from the 85.3% achieved eight weeks ago. Sydney recorded a 63% clearance rate compared to 73.7% eight weeks ago. At their peak, clearance rates hit 45.6% in Brisbane, 77.8% in Adelaide and 65% in Perth. Last week, these cities achieved 32.5%, 51.4% and 14.3% auction clearance rates, respectively.
Cameron Kusher, senior research analyst at Rpdata.com, said auctions currently account for less than a quarter of all dwelling transactions nationally. “Auction clearance rates provide an excellent indication of current market sentiment; the results are more timely than private treaty results which are subject to time lags,” he said.
“We’ve been suggesting for some time that the rate of property value growth will slow in 2010. It seems as if the recent weakness across auction clearance rates, along with a number of other less buoyant housing sector figures, may be providing the first signs of a residential market slowdown.”
However, Kusher pointed out that while auction clearance rates have started to ease, the total number of auctions taking place has remained very strong. “Obviously, there is no shortage of willing sellers in the market,” he added.