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Market update

PPG_Blog-June_image 2 market update 

After signs of softening demand in the previous month, there were more encouraging signals in May. The clearance rate has improved slightly to 70 per cent, there were a record number of auctions, a large number of transactions, ongoing house price growth, and an improvement in market sentiment.

The improved sentiment regarding transactions in May reflected an unusually high number of sales transacted over the month. Historically, the highest number of sales in any given year is recorded in the month of March. However, with nearly 10,700 sales transacted in May, it has surpassed the March figure of 10,400 sales and is now the highest month of the year in terms of transactions.

While sales figures are subject to revision, it is clear that May had a very high number of sales especially considering the record number of auctions held. There were more than 4,500 auctions held in May 2014 which is the highest ever for the month – the previous record was 4,455 auctions in May 2010. With an average of nearly 900 auctions every week in May, the occurrence of ‘super’ Saturdays is becoming the norm.

House prices continue to grow in Melbourne with an increase of another 2.5 per cent in the REIV House Price Index (HPI) in May 2014.

Price growth was evident across all regions, particularly in the middle and outer suburbs. The HPI has now increased by 16.8 per cent since this time last year as the growth cycle continues.

Information courtesy of the REIV Research Bulletin

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