21 September 2015|Gary Shilson-Josling|AAP
House prices just keep on going up even though the percentage of homes sold after being put up for sale is falling.
Auction clearance rates dropped to 70.7 per cent last week, down from 72.1 per cent the week before, according to the weekly report from CoreLogic RP Data.
That was well below this year’s peak of 80 per cent in April and consistent with a fall in clearance rates typical for this time of year.
The seasonal pickup in supply has put some pressure on prices, which stalled from mid-August to mid-September, with an average fall of 0.6 per cent, a typical pattern for this time of year.
But the usual pattern has also been followed with a resumption of price rises.
Last week, the average price in Australia’s mainland state capitals rose 0.5 per cent to be up 11.5 per cent from a year before, with the strong markets in Sydney and Melbourne dominating.
Sydney has been the bellwether for the current boom and currently boasts annual price growth of 17.5 per cent, and a gain of 13.6 per cent so far this year, beating the 12.4 per cent rise seen through all of 2014.
But the Sydney market now faces a rising tide of supply, with the number of homes on the market up 5.0 per cent from a year before and the number of new listings – homes put on the market in the past 28 days – up 19 per cent.
This suggests that increasing numbers of sellers are anticipating a peak in the market – perhaps against the background of a crackdown on prohibited foreign investment in established housing – and getting out while the market is still buoyant.
But buyers are still keen, as the price rises indicate.
Melbourne, the other market with a double-digit annual gains, appears to be at an earlier stage of the housing market cycle.
New listings are up only 3.5 per cent while total listings are down 5.1 per cent as demand has overwhelmed the increase in new listings and helped to lift annual price rises to 14.3 per cent.
The small rise in new listings in Melbourne suggests potential sellers expect further price rises, and the fall in the total number of homes on the market suggests buyers feel the same way as they snap up the properties on offer.
Of course, if the Sydney market falls flat, the Melbourne market could easily top out in sympathy even before realising its potential for more prices rises fuelled by a heady cocktail of optimism and irrationality.
HOUSING PRICES IN THE WEEK TO SEPT 20 – ANNUAL CHANGES
Sydney +17.5 pct
Melbourne +14.3 pct
Brisbane +4.9 pct
Adelaide -0.1 pct
Perth -1.6 pct
Source: CoreLogic RP Data