Auction Action: Big Bubbles? No trouble!

The management/Board of the RBA and APRA must truly be in PM Malcolm Turnbull and Mr Morrison’s good books at the moment.

Governor Glen can expect a triumphant retirement full of flowery speeches and trumpets and parades.  Better biscuits for the RBA Board Meetings as well.

Perhaps a new cone of silence for APRA?   toddler-1312858__180

Nothing a drifting government likes more than a huge bubble in assets prices bubbling away during an election campaign and the RBA and APRA have delivered a beauty!

The latest “bait rate” cut by the RBA really got the juices flowing in Sydney yesterday with a crackling winter day of auction action.

  • 649 auctions listed – and the results of 72% of them reported. Not quite as frantic as 2015 but still streets ahead of 2011 and 2012. The comparison with 2011 and 2012 is the correct comparison as those years were before the RBA and APRA decided to blow the housing bubble up a few sizes on a surge of foreign debt.
  • A clearance rate of 78%
  • Over $7M estimated in agents commissions and no doubt plenty of goodies for the other ‘service providers’ in the FIRE sector.

This bubble blowing effort by the RBA and APRA is even more impressive when one considers:

  • The hysterical fear campaign being run by the government warning that the nation is only a few votes away from economic oblivion.
  • The endless campaigns by property industry rent seekers trying to frighten folks with talk that housing is like a “house of cards”
  • The increasingly determined efforts by the Chinese government to stop illegal capital outflows from China into Sydney property.
  • The announcement by Gladys Berejiklian – the NSW Treasurer – that she is going to follow the Victorian government and start milking foreign property owners with some vigor after 1 July 2016 (when foreign buyers will be required to reveal themselves when buying or selling property)
  • The ATO is now beavering away building a massive national database of property ownership and rental records to help them extract more revenue from property speculators.
  • The FIRB is now working closely with the ATO to extract fatter fees from foreign buyers

With such tales of woe and such determined new gouging of property owners by Federal and State governments one might have thought the Sydney property market might be getting a bit tetchy.

But no!

The Sydney property market listens to Yazz and will accept no other direction than UP.

Of course this wonderful housing bubble is all made possible by APRA’s green light in 2013 to the local banks to take on massive external liabilities.

Without all those hot money / currency war flows rushing in and keeping mortgage rates as low and as close to the RBA target rate as possible – we would not have the amazing combination of record low mortgage bait rates AND an inflated $AUD that makes all those imported cars, gadgets and trips overseas so tempting.

Most Australians don’t even realise that when APRA allowed the banks to go mad – again – after 2013 borrowing ZIRP/NIRP capital offshore it meant that our exchange rate stayed inflated (even as the terms of trade declined) and the ongoing shut down of our manufacturing sector and other export / import competing industries was guaranteed.

But then why would they realise?   It is not as though either of the major parties care to point this out.

When was the last time you heard anyone mention the unmentionable – our exploding privately owed foreign debt?

Why would either of them want to be the one to tell the entitled property speculators of Australia that the price of those record low mortgage rates is their children’s future?

What a buzz kill!

Check out that graph and keep in mind that as it climbs towards $500B – the squabbling about the federal deficit each year usually involves a few billion at most.  Chicken feed compared to the mountain of foreign debt driving the housing bubble.

160613 - External Liabilities

The Sydney Morning Herald and Australian Property Monitors report indicates that agents reported only 72% of the 649 auctions listed for Saturday – which is below average.

160618 - Snapshot

Note:   In order to encourage agents to help APM collate the most complete stats each Saturday night, the Glass Pyramid is presenting all results as a percentage of the number of Auctions Listed.  The reason for this is that agents are more likely to report ‘good results’ sooner and that can tilt the figures when results are presented as a % of what agents have bothered to report on Saturday afternoon.

Realestate.com.au 

Each week Realestate.com.au publishes auctions results (click here) compiled by the good folk at Core Logic RP .  The difference between these results and the SMH/APM results usually arises because they include all auctions during the week, whereas the SMH/APM results are for auctions listed just on the Saturday.  This means that the realestate.com.au number of scheduled auctions is usually higher.

Click on the link to read all the details in their natural habitat but the key “Auction Action” metrics are:

  • No of Auctions:                   728 
  • % of results reported:       75% (549 of 728)
  • Number cleared/sold:        410
  • Clearance as % of rep:       75%
  • Clearance as % of sched:  56%  
  • Pre-Action Panic:               19% (140) of the scheduled auctions
  • Hammer Time:                    43% (310) of the scheduled auctions
  • Seller Sadness:                     14% (99) of the scheduled auctions
  • The metrics are reasonably consistent with the SMP/APM results having regard to the differences in reporting rates.  The higher clearance rate reports by Core Logic probably means that more of the mid-week auctions were successful.
  • The reporting rates for the Core Logic rates varies a lot each week and that affects the figures when expressed as a % of the scheduled number of auctions.

Anyhow – onto the good stuff!

There are THREE tables this week.  The first contains yesterday’s APM’s  results pdf sliced and diced.  The second contains a summary of recent weeks and the third contains the data and averages for the first 13 weeks of Auction Action fun.

Table 1 – Saturday 18 June 2016

160618

Table 2 – Summary of recent results.

160618 - Summary

Table 3 – Summary of the first 13 weeks of Auction Action

160423 - 1st Quarter Summary

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