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Auction clearance rate remains stable as gap between house prices and wages growth widens

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November 22, 2021

Hi ,

The weekend’s auction numbers were strong with 1,038 auctions reported to the REIV.  580 sold at auction, 244 before auction, 4 after auction and there were an additional 213 private sales recorded.  The overall clearance rate was 80% and the final clearance rate for last week is sitting at 82%.  There are over 1,000 auctions scheduled next weekend.

The next two weeks are likely to be the final two weeks of new auction campaigns for 2021 and then we will head into a market of private sales and off market properties with at least a two to three week break over Christmas.

The ABS released their September quarter data and it looks like it is going to get harder for some buyers to enter the property market with the ABS releasing the wages growth for the year to September quarter being only 2.2% and 0.6% for the quarter.  Wage growth is expected to rise over the next twelve months with staff shortages being reported across many different industries.  However, this wages growth will not be anywhere near the rate that property prices have increased over the past twelve months with prices rising from 20 to 30% in the major capital cities and some regional areas and predictions that property prices will further rise again next year.

A four bedroom, three bathroom townhouse at 18A Sea Parade, Mentone went to auction over the weekend with an agent price guide of $1,650,000 – $1,750,000.  The auction was well attended with four bidders participating in the auction.   The property was announced on the market at $1,860,000 and sold for $1,893,000.

A two bedroom apartment at 13/38 Northcote Road, Armadale went under the hammer and was highly sought after by first home buyers.  The property was quoted at $600,000 to $650,000 prior to auction with the last two bedroom apartment in the block selling for $665,000 in January 2021.  The property was announced on the market at $650,000 but bidding soared past this to sell for $711,000.

Have a great week.

Kim Easterbrook

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