Print

Australian auctions suffer despite hopes of rate cuts

Jude Buttle

The prospect of a reduction in official interest rates next month has failed to encourage Australia's property market with auction clearance rates at the weekend taking a hammering.

Ailing Adelaide

Auction sales in Adelaide have all but stalled with the clearance rate falling to 11 per cent; well down from last week's 47 per cent and severely below the 83 per cent recorded for the same weekend last year.

Property research group Braxton Chase head Stuart Palmer surmised that the speculation of an interest rate cut wasn't enough to hearten buyers yet.

"They want to be sure, it's not enough for it just to be likely, it's still too early for us to expect a change in auction results," said Mr. Palmer. "If they do drop we will see a revival in the market for sure, but it might take a while for it to change the results for domestic property."

However, he suggested that auction figures only showed part of the story with private sales and off-the-plan sales still strong.

"They don't account for off-the-plan, our research shows the market has fared really well in this regard over the last quarter," he said.

"This is a very good time for investors and smart investors are already making the most of the expected rates cut."

Melbourne misery

The auction clearance rate in Melbourne was below 50 per cent for the second week in a row and slightly down on the previous week, as well as being dramatically below the 83 per cent recorded for the same weekend in 2007.

The Sydney market showed a slight improvement - the clearance rate of 48 per cent was up two percentage points from last week but was still dismal in comparison with the figure of 69per cent recorded for the same weekend last year.

The market in Brisbane continued to defy early predictions of a solid year.

The clearance rate of 22 per cent was down, 3 percentage points from last week and more than 20 percentage points lower than the figure recorded for the same weekend last year.

So, even with the possibility of an interest rate cut on the horizon, the Australian property scene still shows signs of concern.