Clear­ance rate slides on in­vestor crack­down

The Australian - - THE NATION - SI­MONE FOX KOOB

A rise in the num­ber of homes on the mar­ket and new reg­u­la­tions for in­vestors have led to a soft­en­ing in Syd­ney’s auc­tion clear­ance rate, which was 12 per­cent­age points lower on the week­end com­pared to the same pe­riod a year ago.

The city recorded a 69.4 per cent pre­lim­i­nary clear­ance rate for 897 auc­tions, ac­cord­ing to CoreLogic, com­pared with an 81.6 per cent clear­ance rate over 815 auc­tions on the cor­re­spond­ing week­end last year.

Na­tional auc­tion mar­ket com­men­ta­tor Kevin Bro­gan said sev­eral fac­tors had contributed to Syd­ney’s low clear­ance rates over the past year.

“Clearly we are now in the third week­end of the spring sell­ing sea­son and what we have def­i­nitely seen in Syd­ney is more stock com­ing onto the mar­ket. That’s some­thing which you are see­ing in Syd­ney but not so much in Mel­bourne,” he said.

“One of the other fac­tors is the new reg­u­la­tory en­vi­ron­ment for in­vestor bor­row­ers ... the lim­its on in­ter­est-only loans and a round of in­ter­est rates be­ing in­creased for in­vestor fi­nance.

“In Syd­ney more than 50 per cent of the mar­ket ac­tiv­ity is in­vestors. So the Syd­ney mar­ket would be the mar­ket you would ex­pect to be most im­pacted by re- stric­tions on in­vestor bor­row­ing.” How­ever, Mr Bro­gan said strong clear­ance rates were be­ing recorded in tra­di­tional owne­roc­cu­pier ar­eas of the city, which sup­ported the idea that the bank­ing reg­u­la­tor’s crack­down on in­vestor ac­tiv­ity was the driver be­hind the trend.

“When you look at ar­eas where tra­di­tion­ally you have some re­ally strong auc­tions re­sults — North Syd­ney, Hornsby — pre­lim­i­nary clear­ance rates were 77.88 per cent, with a rea­son­able vol­ume of sales in that lo­ca­tion. The east­ern sub­urbs recorded 78.82 per cent. These are re­ally quite de­sir­able, owne­roc­cu­pier, high-value sub­urbs, and they are re­ally do­ing quite well. It maybe sup­ports a view that it's the head­winds faced by in­vestor pur­chases which might be hav­ing an im­pact on the mar­ket.”

Na­tion­ally, the hous­ing mar­ket last week recorded its busiest auc­tion ac­tiv­ity since the be­gin­ning of June, af­ter a slow start to the spring sell­ing sea­son.

Mel­bourne had the high­est vol­ume, with 1268 auc­tions and a clear­ance rate of 73.6 per cent, higher than last week’s 71.8 per cent but lower than last year’s 77.8 per cent.

Brisbane’s clear­ance rate was just 49 per cent, higher than last week’s 38.8 per cent, and Ade­laide recorded a solid 75 per cent pre­lim­i­nary rate, up from 66.2 per cent the week be­fore.

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