Australian auction rates return to highs

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Buying a home is becoming increasingly competitive.

Properties sold at auction have neared the high percentage clearance rates of the boom in 2007. While fewer properties are for sale, buyers, at least in some locations of the country, have been steadily snapping up the rarer options.

In Melbourne, the Real Estate Institute of Victoria reported an 82% auction clearance rate for 7 June. Last year, the rate had reached as low as 51% and rarely got much higher than 60%. On a year-to-date basis up to 11 June, the clearance rate is 78%, according to the REIV. This is better than the 67% of last year, but still lagging overall the 83% of 2007.

The Australian has also reported figures showing auction clearance rates were approaching 2007 levels on a national scale.

PRDnationwide is one of the agencies reporting that its auction rates were higher than expected lately.

"Interest rates are low, and the First Home Owner Grant is making buying easier for some," said Nick McGuire, director at PRDnationwide New Farm. "The market has bottomed, and these were real sellers - not pretend ones."

McGuire said some sellers have wanted to complete a sale before the end of the financial year, increasing their motivation to accept an offer. An auction generally leads to a significantly shorter time on the market as well, he said.

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