Spike in Auction Clearance Rates Show Consumer Confidence in the Property Market

August 27th, 2013

Auction clearance rates rose to 10% from last year as consumer confidence grew in the property market, according to Property Observer.

However, the recovery of the property market, with clearance rates over 70% in Sydney and Melbourne, was seen since mid-2012. After all, the housing market is cyclical and when it bounces back, buyers will re-enter the market.

The main factors indicating a property market recovery include affordability, financial capacity and demand. Due to the high Australian dollar, the RBA cut interest rates by 75 basis points, which increased the affordability of homes. Many people are also saving their disposable income and using it to pay off their mortgages.

Furthermore, housing demand is high in Australia, as homeowners feel the need to upsize or downsize their home. 70% of homeowners own their homes, but having more property is seen as an Aussie pastime. Recent web statistics by Nielsen show that browsing for homes on the Internet is still very high, with 3 million property searches each month. This means 15% of the Australian population are looking for property, which is translating into the physical market and driving up auction clearance rates.

Source: http://www.propertyobserver.com.au/housing-affordability/melbourne-and-sydney-clearance-rates-are-the-result-of-buyer-confidence-returning-mark-armstrong?utm_source=po&utm_medium=aida&utm_campaign=upperright