Sydney Housing Market Update | May 2019

[@anon8095]

Auction clearance rates are statistically meaningless. Consider: Below are some key statistics comparing the average ‪Saturday night‬ Domain-reported preliminary auction results for Sydney for March-May 2017 (the peak of the market) with March-May 2019. 1. Domain REPORTED rates dropped from 69.8% to 54% 2. Domain WITHDRAWN rates rose from 5.5% to 13.6% 3. Domain CLEARANCE rates dropped from 78.6% to 59.3% 4. UNREPORTED rates rose from 24.7% to 32.3% 5. Sold to listed properties dropped from 59.4% to 39.9% 6. Unknown results jumped from 35.7% to 59.6% (that is 3 out of 5 listed properties were either not reported or were withdrawn) To understand these figures, we first need to understand that Domain considers withdrawn properties the be reported (even though no results were reported, and that properties sold prior often do get reported). ‪To that point, of note is 90 of the 341 properties reported in Sydney were listed as ‘sold prior’, 26.5%, something agents seem happy to do for sold listings, supporting the belief ‘withdrawn’ is a euphemism for ‘not sold’?‬ Second, we need to understand that higher UKNOWN rates (unreported + withdrawn) inflate CLEARANCE rates, as exemplified by a simple sample data set where 20 properties are listed and 8 are sold. If 100% of results are reported, that is 8 out of 20, the clearance rate is 60% If 80% of results are reported, that is 8 out of 16, the clearance rate is 50% If 60% of results are reported, that is 8 out of 12, the clearance rate is 67% If we apply the total unknown results for 2017, i.e. 64.3% known, that is 8/12.86, the clearance rate is 62.2% If we apply the total unknown results for 2019, i.e. just 40.4% known, that is 8/8.08, the clearance rate is, well, 99%. So what does that say about preliminary clearance rates? In short, from the same primary data, the more properties whose results are unknown, the higher the clearance rate. Question: If Domain clearance rates fell 78.6% (March-May 2017) to 59.3% (March-May 2019), BUT the withdrawn rate rose 5.5% to 14.6% AND the reported fell 69.8% to 54%-i.e. the two key variables that can be manipulated to inflate clearance rates-then how bad is the market now? Answer: It is simply statistically impossible to say when the results of 59.6% of listed properties, 3 out of 5, are unknown. That is, no statistical meaning can be interpreted from preliminary clearance rates. We need to look at actual sales figures to see the state of the market, which can only be done in retrospect once sales go through. Other sources, also retrospective, for example the $5.2 billion hole in the Victorian budget due to falling stamp duty, are also useful indicators.

[@nhall00195]

Rate of decline is easing. Haha. Market is dead.

[@michaeldoyle5737]

talk it up puppet