Data released this week by the Australian Bureau of Statistics reveals that completed construction activity rose by 12.5% in the last quarter. This does not mean, however, that the building industry is bouncing back. This increase was driven by engineering works, with the building sector experiencing only a tiny increase of 0.6%.
Successful auctioning is always an indicator of a thriving market, but unfortunately auction clearance rates are on the decrease again. The average capital city rate has remained below 50% for 20 consecutive weeks, but Brisbane is well below that at 30.1%. Little wonder that the number of properties taken to auction has fallen in the last week from 1,893 to 1,699.
The number of properties for sale nationwide is 28.1% higher than it was this time last year, and 26.3% higher across the combined capital cities. Given this surplus of houses, and the attendant lack of competition, home owners will inevitably have to drop their prices to attract buyers.
With the high number of houses on the market at the moment and low auction clearance rates, consumer confidence was still low in the month of October, and I predict that the spring stats (which are traditionally some of the highest of the year) will be low again this year. Hopefully things will improve in the New Year.
*Data courtesy of rpdata.com
