Auction clearance rates in almost all Australian capital cities have risen strongly since this time last year in a dramatic turnaround of confidence in the residential real estate market.
More than 80 per cent of homes offered at auction in Sydney this week have sold, according to Kevin Brogan from property analytics company CoreLogic.
More than 2000 homes were offered at auctions in Australia last week and 77 per cent of them sold at auction.
Auction clearance rates in Melbourne, Adelaide and Canberra were all more than 75 per cent this week.
The only capitals which remain depressed are Brisbane and Perth although clearance rates have risen to 59 per cent and 42 per cent respectively this week.
The turnaround is due to several factors including interest rate cuts, certainty returning to the investor market around negative gearing and capital gains tax concessions, a return to the market by first home buyers and changes to borrowing as a result of the banking royal commission.
"The market started strengthening before the federal election this year but the fact that it continued strengthening was because of the certainty that negative gearing and capital gains tax concessions are going to continue," Mr Brogan said.
"Then we saw two interest rate cuts."
First home buyers have also returned to the market.
"For the month of July there was a 20.9 per cent increase in the value of first time home buyer borrowing," he said.
"All of these things are influencing buyer confidence in the market and that has led to such a sustained increase in confidence."
In addition to the positive sales results at auction, prices have also begun to rise.
Australian Associated Press