Another scorching weekend of auctions. Where are we going?!?
Everyone’s talking about how hot the property market is right now.
They’ve got no idea.
This is only the beginning.
Because NSW and Victoria are only making the first tentative steps towards reopening, and already the auction market is white hot.
The national clearance rate – the proportion of auctions that ended with a successful sale – popped to 81%, which is pretty much as good as it has ever gotten.
Sydney is absolutely blistering at 85%, while Victoria is very solid given the circumstances at 79%.
But what’s really interesting for me is what’s happening with the smaller capitals.
I mean look at Perth! 86%!
And Brisbane at 78% is twice as good as it usually is. I’ve never really understood why, but auctions just never do all that well in Brisbane. But not these days. Oh no. They’re going off.
And it’s the same story in Adelaide.
And it is true that the volumes in the smaller capitals are nothing like what they are in Sydney and Melbourne, but that’s always the way.
And it does make you wonder. Covid has just changed the way we’ve done so many things. It makes me wonder if Brisbanites will look at these auction results, and come around to auctions more in general.
The other key thing to note is here is that volumes are up strongly across the board.
According to CoreLogic, “there were 2,920 homes taken to auction across the combined capital cities this week, the busiest auction week since late June when 2,960 capital city homes were taken to auction, and the fourth busiest auction week so far this year.”
So it’s on like Donkey Kong.
And properties are selling like literal hot cakes (in a paper bag, with sugar on them).
Sales volumes so far this year are well above their five year average.
And home lending has gone vertical, and people load up on the credit:
And all that is happening with the two largest states in lockdown.
What happens when we put all that behind us?
What happens when we go back to normal? What happens when people can actually get around to open inspections?
If things are this hot now, what happens when we come back from the Christmas break, with stockings full of cash and a world returning to normal?
It’s hard to imagine, with property prices already growing at 20% a year across the country.
But remember, in New Zealand they got to 30% before the pace of growth started to ease a little.
It sems like a big stretch from here to there, but I wouldn’t be discounting it.
All the factors are there.
The powder keg is ready to blow.