Canberra property: lower auction clearance rates indicate easing in buyer activity

The Canberra home auction market reported a decline in clearance rates over April, pointing to weaker underlying buyer activity.

Canberra recorded a clearance rate of 62.2 per cent over the month, which was down on the 65.6 per cent recorded over March and also below the 69.2 per cent reported over April last year.

Despite falling clearance rates over the month, the median sale price of homes sold at auction in Canberra increased to $691,000, compared to the $680,000 recorded over the previous month. April prices were also well ahead of the $651,250 reported over April last year.

Auction listings also increased over April, averaging 53 per weekend compared to the 44 listing average over March and well ahead of the 30 average weekend listings reported over April last year.

Most capital city housing markets reported weaker auction clearance rates over April, with the exception the solid Melbourne market, where rates increased to a capital city high of 72.5 per cent.

Canberra home buyers and mortgage holders will benefit from the decision by the Reserve Bank to cut official interest rates to a new record low of 1.75 per cent over May. The cut followed 11 months with rates on hold and reflects growing concern over the state of the national economy.

A key to economic stimulus from lower official interest rates is the banks’ decision to pass on the reduction to customers.

Housing markets may also benefit from various tax relief measures announced in the budget that should increase disposable income and provide economic support for lower interest rates.