February 11, 2021
Australia is experiencing its hottest streak of auction clearance rates in six years, with demand for properties under the hammer soaring.
On the weekend of February 6 -7 the combined capital cities had a preliminary auction clearance rate of more than 83 per cent, the best ever rolling success rate recorded by CoreLogic.
Adelaide led the pack with a clearance rate of 90.1 per cent from 56 auctions, while Sydney and Melbourne had clearance rates of 88.5 per cent and 81.6 per cent, respectively.
To put that in perspective, a balanced market (i.e., similar number of buyers and sellers) is generally accepted to have a clearance rate of about 60 per cent to 70 per cent.
It is also worth noting that the number of properties going to auction is on the way up with a 37 per cent increase in Melbourne this month compared with the same time last year.
That’s a clear sign of there being less supply than buyer demand out there right now!
In other news, the Australian Bureau of Statistic’s net interstate migration data for the September 2020 quarter has been released.
Population growth plays a big role in housing demand. Before COVID-19 the population in Australia was growing by about 375,000 people a year with 145,000 of those births in excess of deaths and 232,000 overseas migrants, while the balance was largely overseas students.
There was also some population movement between states and cities but with a temporary slowdown in the rate of overseas migration as a result of the COVID pandemic, interstate migration movements have become even more important than usual.
The data tells an interesting story and shows a clear movement away from capital cities.
There were 11,247 more Australians leaving capital cities compared with those arriving during the September quarter – that’s a record in data stretching back 19 years and an increase from the
10,957 net departures during the three months to June and twice the number from a year earlier.
The figures confirm a big movement into the regions and city fringes.
Queensland was the big population winner with a 7,327 net increase in interstate migrants in the September quarter, taking the 12-month tally to 27,115 which is the highest annual increase since 2005 (no coincidence, that as the last time the SEQ market boomed)!
South Australia was the other surprise, recording a second consecutive quarter of net increase in interstate migration. The first time since before 2000.
Perhaps unsurprisingly, New South Wales experienced a net decrease of 4,609 people during the quarter with Sydney as a capital city experiencing a net decrease of 7,800.
Population growth is a big reason why there has been monthly +1 per cent price growth in the Brisbane and Adelaide house prices in recent months.
In the commercial property market a new study reveals capital city commercial tenants are returning to their offices, with an increase in the number of workers making their way back to the office between Christmas and Australia Day.
Melbourne numbers increased from 13 per cent to 31 per cent in that period (although that might change for the next week or so). Sydney office staff occupancy is running at 45 per cent while Brisbane, Canberra and Adelaide are running at 63 per cent, 68 per cent and 69 per cent respectively.
Perth was the only market to experience a decrease with 66 per cent of their tenants back in the office during that period, down from 77 per cent prior to Christmas (no doubt due to their recent lockdown, too).
It will be interesting to watch that space between now and Easter…
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