Later in the month, REC reported that the last full weekend of August had increased auction clearance rates in Sydney and Melbourne again. REC quotes REINSW President Leanne Pilkington, saying there was “nowhere near enough” buying options to satisfy current demand.
“Last weeks open home attendances were up 42 per cent, clearly demonstrating that buyers are back in the market,” she said.
“We just need some sellers to join them.”
Sydney’s preliminary clearance rate for the last week of August was 84.7% from 500 auctions – apparently the highest percentage since Feb 2017 – and the previous week (ending 18/08) clearance rates were 76.2% for 446 auctions. However, again, the volume of properties sent to auction was significantly lower.
There is some conjecture around whether the recent upswings in the property market are a positive mini bubble (or ‘pop’), absorbing a pent up demand. Stephen Letts, writing for the ABC asks whether the upswing is sustainable, and delineates the difference between pop and bubble. In a similar vein, The Real Estate Conversation reports that the Housing Industry Association’s latest quarterly outlook predicts a market when new home construction (sooner rather than later) meets, rather than exceeds, population growth, and that overall this will be an asset to the larger economical outlook.
HIA’s Chief Economist Tim Reardon summarises it thus (note there is a lot of ‘ifs’ in this):
“If economic activity improves, the credit squeeze dissipates, home prices stabilise and the recent stimulus measures take hold, the supply of new work into the pipeline will soon reach its low point.
“All indications are that this stabilisation will occur and prevent a more significant downturn.
“This new equilibrium will see the number of new homes remain around 180,000 per year, not in excess of the 200,000 that have been built each year, for the past five years.”