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Low rates encouraging investors? Whoda thought?




Sydney’s auction clearance rates hit new high


The median house price in Sydney was $6000,000, according to RP Data. Photo: Jessica Shapiro

Duncan Hughes

Volatile sharemarkets, low returns on fixed income and low interest rates contributed to clearance rates of more than 80 per cent in Sydney property auctions, some of the highest rates since the financial crisis.

Buying was particularly strong in the $1 million to $1.5 million range but continued to be flat in the prestige market. A three-bedroom terrace in Randwick was the most expensive sale at $1.8 million, Australian Property Monitors said. “The Sydney market is being energised,” said Andrew Wilson, APM’s senior economist, who estimated more than half the sales are by investors, many of whom are seeking capital growth from property in their ­self-managed superannuation funds.

Other auction monitors also had Sydney’s clearance rates at four-year highs.

Auction clearance rates are lifting and are up on the same time last year, but only incrementally as confidence remains weak.

By comparison, Melbourne’s auction clearance rate was a “solid” 70 per cent. “There are some signs that it is increasing across most price brackets and regions,” said Dr Wilson.

The highest price was $1.8 million for a three-bedroom house in Kerford Place, Albert Park, a coveted inner-Melbourne address.

Political uncertainty about the timing and outcome of a federal election, high-profile job losses in key manufacturing and mining companies and nervousness about the economic outlook are weakening demand.

Most other major market clearance rates have risen because of lower interest rates with variations usually reflecting the impact of local economic conditions.

For example, Brisbane’s clearance rate was more than 65 per cent on the weekend, more than double what it was for the same time last year.

According to RP Data, the median house price for Sydney was $600,000, and it was $448,000 in Melbourne.

http://www.afr.com/p/business/property/sydney_auction_clearance_rates_hit_mMOZvinB3uIOOQOKnUO22M