Clearance rates rose to record highs over the weekend and the number of auctions in capital cities increased by more than 70 per cent to 2847 from a week earlier.
The national clearance figure of 82 per cent was driven by a record 85.2 per cent in Sydney and a rate in Melbourne – the country’s biggest auction market – that jumped to 79 per cent from 69.2 per cent a week earlier, initial figures from RP Data show.
The “extraordinarily strong” market in Sydney was evident in the city’s regional clearance rates, with the south, inner-west and south-east all reporting clearance rates above 90 per cent, said Australian Property Monitors’s senior economist Andrew Wilson.
“The market appears to be continuing to rise,” Dr Wilson told The Australian Financial Review.
“We’re seeing anecdotally reports of auction reserves being exceeded by 10, 15, 20 per cent.”
In the north Sydney suburb of Cammeray, a three-bedroom townhouse sold for $1,065,000, pushed by four bidders $115,000 above the reserve price of $950,000.
That the property attracted young couples and families, downsizers and mature singles highlights the sustained strength of the mid-level market for houses, Belle Property agent Jane Garwood said.
“The townhouse-semi market is strengthening as the affordability of houses becomes more prohibitive,” Ms Garwood said.
In Maroubra on the other side of the harbour, a two-bedroom entry-level apartment on Malabar Road with carpark and sea-view balcony sold at auction for $720,000, nearly 11 per cent above the reserve price of $650,000.
“We’re finding there’s a variety of different people – people looking for an investment, first-home buyers, offshore buyers,” said McGrath Coogee agent Nick Simitzis.
The apartment market has fired up as prices of standalone homes have climbed out of reach, Mr Simitzis said.
“For Randwick and Coogee, you can’t buy a freestanding house for under $1.8 million,” he said. “There is still quite bit interest in the bigger stuff, but it’s nowhere as competitive.”
There are now signs, however, that even the top end of the market is picking up, Dr Wilson said. “That’s been the quieter end of the market over the last year or so, but we’re now starting to see prestige property also gather some sort of energy,” he said.
In Melbourne, where the prestige market was leading the charge, the clearance rate was 80 per cent in the inner eastern suburbs over the weekend, Dr Wilson said.
The Melbourne market, however, is likely to be weaker than Sydney overall this year, as unemployment is higher and there is more confidence-denting uncertainty, he said.
There are some signs of moderation. RP Data’s weekly price index fell in Sydney, Melbourne and Brisbane.
The Perth index was unchanged and for Adelaide the figure rose 0.2 per cent. Prices are down in each of the other capital cities from a month ago, with the exception of Sydney, where prices are up 0.7 per cent, despite the weekly dip.
Right now, things are strong. On Saturday six bidders pushed a two-storey, four-bedroom family home at Cole Street in Melbourne’s Hawthorn East, to a selling price of $2.1 million.
“This period leading up to Easter is always a good time to be selling or buying a house,” Melbourne buyer advocate Mal James said.