Solid start for Brisbane home auction market

The Brisbane auction market has begun the year with relatively moderate results as it looks to build on its solid end to 2015.

The home auction clearance rate lifted in February, up 3 per cent on December’s 44.8 per cent result.  Although the 47.8 per cent recorded was an improvement, it nonetheless remained below the 49.8 per cent recorded in February 2015.

The median auction price fell by 2.8 per cent over February to $700,000 compared with December’s $720,000. However, it was 7.7 per cent higher than the $650,000 recorded in February 2015.

Auction listings over February were marginally higher than in the same month in 2015, rising from an average 130 to 134 a weekend this year.

The home auction market has started the year with relatively steady results, although the prospects for the upcoming autumn market remain mixed based on these results.

Low interest rates will be a key catalyst driving higher levels of housing market activity this year, with the Reserve Bank deciding this week to again leave rates on hold over March. Rates have now been steady at the record low 2 per cent for 10 consecutive months, although the prospect remains for a near-term cut.

Recent economic data has been disappointing with the Australian Bureau of Statistics national unemployment rate back up to 6 per cent, wages growth the lowest on record and the confirmation the peak of the home-building boom has clearly passed.

A sustained period of unemployment above 6 per cent will likely motivate the bank to cut rates in attempt to stimulate an increasingly lifeless economy.  

Dr Andrew Wilson is Domain Group chief economist. Twitter: @DocAndrewWilson