The clearance rate dropped slightly again this weekend however stayed stronger than I was expecting ahead of Saturday’s federal election. Of 802 auctions reported to the REIV, 444 properties sold at auction, 125 sold before auction and there were an additional 176 private sales. This resulted in a clearance rate of 71%.
The drop in the clearance rate has been a welcome reprieve for buyers who have been able to enjoy a market with less buyers willing to transact. That being said, there a lot of buyers who are currently sitting on their hands and will no doubt build confidence to buy over the next few months. On the flip side of this, there has been less properties on the market.
With the election less than a week away, both Liberal and Labor parties are ramping up their campaigns and announcing policies to help buyers enter into the property market. The Labor Goverrnment announced a new initiative that would assist first home buyers or buyers who have been out of the market for some time and are struggling to get back in. Income thresholds would be upto $90,000 for singles and $120,000 for couples and upto 10,000 households a year would be eligible for this scheme. The scheme suggests that the Labor Government would contribute upto 40% of the purchase price of a new home and upto 30% of the purchase price for an exisiting home with an option to be able to buy the government out. When the property is sold, the government would take back its equity (a lot of grey areas around this policy, especially if the home buyer has renovated the property).
The Liberal Government yesterday announced the Super Home Buyer scheme which would enable first home buyers to use upto 40% of their super, up to $50,000 to put towards buying a home (both existing and new). The conditions are that this is for first home buyers only, they must live in the home for at least 12 months but there is no restrictions on age, the property type or income thresholds. When the property is sold, the full deposit must be returned to the super fund plus 10% of the capital gain.
Any assistance a first home buyer can get to enter the highly priced property market is no doubt welcomed with CoreLogic releasing data last week suggesting that it takes on average, 11 years for a median 20 per cent deposit to be saved.
Whilst some buyers are currently in a ‘wait and see’ phase and we have seen a softening of the clearance rate, there were still some strong results with properties selling well over reserve. 11 Thames Street, Northcote was hugely contested by four bidders. The near new family home sold for a huge price of $4,302,000 which was $502,000 over reserve.
On the other side of town, another $500,000 sale over reserve, 123 Union Street, Brighton East went under the hammer. This property is a land site (595 sqm) with a liveable house on it. Six bidders participated in the auction with the auction starting on a genuine bid of $1,300,000. The property was announced on the market for $1,550,000 and sold for $2,050,000.
Have a great week.