For much of this year auction clearance rates for Sydney have consistently hit above 60 per cent.
Even as the market outlook for 2009 appeared hazy auction results remained consistent.
The low stock levels are driving competition at auctions as prospective buyers compete for scarce homes, sometimes leading to higher than expected prices.
And the interest is not limited to the bottom end of the market either with a trickle of $3 million-plus properties also selling under the hammer in both NSW and Victoria.
In Sydney, eastern suburb’s agents claim property in all price brackets are selling under the hammer and put the higher clearance rates down to a “shortage of stock, low interest rates and confidence".
The results are in line with other “green shoot” indicators that are showing signs of a stabilising or improving market, with median prices, housing finance figures, building approvals and general consumer sentiment all up.
According to RP Data figures 70 per cent of auctions nationally in July had a successful outcome compared with less than 50 per cent at the end of 2008.
Although not always considered the best indicator of market conditions, RP Data’s national research director Tim Lawless said auction clearance rates did indicate some measurement of real estate sentiment.
RP Data attributes the improved figures to strengthening market conditions and consumer optimism. Mr Lawless also said vendors were more realistic in their price expectations.
“When market conditions are subdued, auction clearance rates tend to be poor. But when market conditions are buoyant, clearance rates are generally high – this was certainly demonstrated through most of 2008 with very low clearances,” he said last month.
Australian Property Monitors has found auction figures are at their 2007 levels with the upcoming spring selling season, which results in a listings peak, would be indicative of true market forces.
“The market has recovered from last year. Month on month clearance rates show some real promising signs and in Sydney and Melbourne clearance rates are around the long-term averages,” APM’s head of property research Yvonne Chan said.
Prices too have been picking up, with an increase in bidders resulting in above reserve prices, particularly on property up to $1 million in Sydney and on land in Melbourne.