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Home prices up, auction numbers down

AAP logoAAP 5/09/2016 Garry Shilson-Josling, Economist

With the number of homes being auctioned falling and the prices rising, the national housing market is increasingly dependent on a shrinking band of die-hard band of buyers.

The 78.4 per cent auction clearance rate for the week to Sunday reported by CoreLogic on Monday was as high as it's been since May last year.

And the annual growth in home prices was also steep, again of seven per cent on average for the five mainland state capitals, with a 7.5 per cent rise since the start of the year.

Sydney is again leading the charge, with annual growth of 9.6 per cent just eclipsing Melbourne's 9.2 per cent.

The gap has widened markedly this year, with rises averaging 12.1 per cent for Sydney over 2016 so far, versus 8.6 per cent for Melbourne.

But despite the stellar price gains, the overhang of unsold homes on the market continues to grow.

Overall, there were 101,847 homes listed for sale in the nation's capitals, up by five per cent from a year ago, even though prospective sellers have been increasingly likely to bide their time.

The number of new listings - homes put up for sale in the past four weeks, was 25,310, down by six per cent.

The picture varies between the major markets.

In Sydney, new listings are down by 21 per cent but there are still one per cent more properties in total waiting for a buyer.

In Melbourne, new listings are down five per cent but total listings are virtually unchanged from a year ago.

And in Brisbane, new listings are up by six per cent, but the total number of the market is up even more, by 11 per cent.

In Perth, new listings are up by 11 per cent but total listing are up by 17 per cent, putting the number on the market in the western capital at 22,354, behind Melbourne's 27,883 but well ahead of Brisbane/Gold Coast's 19,375 and Sydney's 19,303.

In either case, the proportion of homes that are newly listed is falling - a story told among all the state and territory capitals except Hobart and Canberra.

It's clear that part of the reason for the market's second wind, after a pause last year, is a restriction of supply by potential sellers that's more than matched any waning of demand.

The number of auctions reported by CoreLogic last week was 1,858, down by 19 per cent from this time last year, meaning completed auction sales are down 13 per cent despite the higher clearance rate.

The restrict supply of new listings, resulting in lower auction numbers, has to be a major part of the story of ongoing price rises.

Yet the buyers still in the market are keen enough, so far at least, to be undaunted by the increasingly loud claims that the market is in a bubble.

PRICE CHANGES

Sydney: year-to-date +12.1 pct, annual +9.6 pct

Melbourne: year-to-date +8.6 pct, annual +9.2 pct

Brisbane: year-to-date +2.1 pct, annual +4.2 pct

Adelaide: year-to-date +3.4 pct, annual +3.0 pct

Perth: year-to-date -5.1 pct, annual -4.5 pct

Combined 5 capitals: year-to-date +7.5 pct, annual +7.0 pct

Source: CoreLogic

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