Strongest weekend of auctions in 12 months
It was an auction weekend of both quality and quantity. A preliminary clearance rate of 66.4 per cent from 1,500 auctions, compared to 52 per cent clearance from 2,000 auctions this time last year.
In Sydney, CoreLogic recorded a preliminary 74.7 per cent clearance on 522 auctions. Melbourne saw 67.9 per cent from 725; Adelaide and Canberra's clearance numbers also went up, while Brisbane and Perth volumes were lower than the week prior.
Differences of opinions on the state of the market abound at the moment, which seems to come down to whether the speakers are looking forward or at current balance sheets. You'll find McGrath real estate and Australia's largest listed residential developer, Stockland standing in the latter camp; McGrath issued profit warnings on Friday and as we heard last week, Stockland is experiencing a rise in buyer defaults.
McGrath CEO, Geoff Lucas said we're "closer to equilibrium" but that it's going to take a while before the good time start to roll again. Stockland's holding its cards close but will release the full extent of losses when it releases full year accounts later this year; its default ratio is now sitting around 5 per cent.
Large apartment project developers in Sydney are no doubt helping these two groups prop up the bar at the moment. Urban Institute of Australia chief exec, Steve Mann said deferred and abandoned apartment project numbers in Sydney have increased 110 per cent in 12 months.
Ghosts of Opal Tower haunt Mascot
Mascot Towers residents received an email last Friday night around 8pm advising them they had an hour to vacate the premises. This article lays out the structural issues with the 10-year-old tower and why cracks have appeared in the foundations.
Apartment developers had hoped the fallout from the Christmas Eve evacuation of Sydney Olympic Park's Opal Tower was behind them. This Mascot situation has dredged it all back up; you couldn't move over the weekend and into today without finding a story about apartment development defects.
Calls of a royal commission into the building sector have been reignited. A lack of communication with affected Mascot Towers residents has made things worse and given media plenty of cranky apartment owners to speak with - on top of which, the residents of Opal Tower are also taking advantage of being back in the spotlight.
The suggestion that apartment owners are likely to have to foot the bill in this case has thrown fuel on the fire. Claims the cracks appeared due to construction of a new tower opposite haven't helped either.
The timing is perfect for the authors of a report which is due to be released this week, showing that defects are rife in major residential high-rise projects across Australia.
All told, this is going to be a very tough week for anyone in the business of building or selling apartments.