Strong holiday result for Canberra auction market

The Canberra weekend home auction market produced a strong result for sellers on Saturday despite the distractions of the Labour Day long weekend and school holidays.

Canberra recorded a clearance rate of 73.1 percent on Saturday which was well above the 64.9 per cent reported the previous weekend and also significantly higher than the 58.3 per cent recorded over the same holiday weekend last year.

The weekend result was the highest recorded by the local market for six weeks and although weekend results can be volatile, the recent underlying trend for the local market remains robust.

35 homes were listed for auction over the holiday weekend in Canberra which was predictably higher than the 65 auctioned the previous weekend but well ahead of the 16 listed over the same holiday weekend last year. Auctions will increase sharply next weekend with 60 homes set to go under the hammer.

Weston Creek reported the highest regional clearance rate at the weekend with 100 per cent results from the single reported auction followed by Belconnen with 80.0 per cent, Woden Valley  75.0 per cent, Tuggeranong 64.3 per cent  and Canberra Central with a  clearance rate of 40.0 per cent. No auction results were reported for Gungahlin at the weekend.

Canberra Central, Tuggeranong and Woden Valley all recorded 100 per cent clearance rates at the weekend followed by Gungahlin 60.0 per cent and Belconnen 50.0 per cent.

Notable sales reported at the weekend included a  4  bedroom home at 1 Dreyer  Street Franklin sold for  $1,040,000 by LJ Hooker Gungahlin, another  4  bedroom home at 68 Magrath  Crescent Spence sold for  $1,000,000 by Ray White Canberra, a  6  bedroom home at 26 Pambula  Street Kaleen sold by Ray White Canberra for  $872,000, a  4  bedroom home at 6 Gordon  Close Nicholls sold for  $816,000 by LJ Hooker Dickson and a  3  bedroom home at 10 Storey  Street Curtin sold by IPG Woden Weston Creek for  $745,000.

The most expensive property reported sold at auction was  a  4  bedroom home at 12 Lilley  Street O’Connor sold for  $1,305,000 by First National Capital. The most affordable property reported sold at the weekend was a  3  bedroom home at 42 Mountain  Circuit Calwell sold for  $434,000 by Luton Properties.

For a list of Canberra auction results click here Canberra auction results September 30.

Canberra recorded a median auction price of $708,500 on Saturday which was higher than the $700,000 reported over the previous weekend. A total of $11.6m was reported sold at auction in Canberra at the weekend.

Lower interest rates have fuelled recent strong house price growth in Canberra with current robust auction clearance rates indicating the likelihood of continued home price increases over the spring selling season.

The Reserve Bank is due to meet this week to decide on the direction of official rates over October and is almost certain to again leave rates on hold at the record low 1.5 per cent where they have remained for 14 months since the cut in August last year.

Although economic data improved last month with strong jobs growth reported by the ABS, unemployment steady and an improvement to the prospects of the federal government’s budget bottom line, the national economy is not out of the woods yet.

The conundrum of stagnant incomes growth and low inflation despite improved labour market conditions remains perplexing for policymakers.

The prospect of higher rates also remains fanciful under current macroeconomic conditions with the last increase in rates occurring nearly 6 years ago in November 2011 – which is a record period without an official rise from the RBA

Dr Andrew Wilson is Domain Group Chief Economist Twitter@DocAndrewWilson join on LinkedIn and Facebook at MyHousingMarket.