The Adelaide auction market bucked the downward trend of other capitals and reported a stronger month for activity over September.

The local September clearance rate of 65.3 per cent was just ahead of the 65.2 per cent recorded over August and just below the 66 per cent recorded over September 2014. September’s clearance rate is the highest reported so far this year by Adelaide and reflects a local market building on a steady revival of buyer confidence over the past year.

Auction volumes in Adelaide also continued to increase, reflecting sellers’ confidence in local conditions. An average 69 auctions were conducted each weekend over September – up on the average of 57 over August and well ahead of the 49 over September last year. Sharply higher volumes are, however, proving no barrier to higher clearance rates.

Adelaide’s median auction prices also continue to increase steadily, reflecting the rising strength of the local market. The September median of $597,500 was well ahead of the $531,000 reported over August and a sharp 14.9 per cent higher than the $520,000 reported a year ago. Adelaide’s annual median auction price growth is now second only to Sydney’s.

Metro East reported the highest September auction clearance rate of all the Adelaide regions, with 68.9 per cent, followed closely by Metro South with 67.6 per cent, Metro West 64.1 per cent and Metro North well below at 50 per cent.

Auction numbers will continue to rise in Adelaide over the remainder of the spring selling season, presenting solid tests for the local market. Auction results, however, remain encouraging for both buyers and sellers with confidence clearly on the rise in the local market.

The Reserve Bank meets for its regular monthly interest rate decision next week, with the most likely scenario being for rates to remain on hold over October for the fifth consecutive month. However, given a volatile sharemarket, continuing mixed economic news and a weakening global economic outlook, the chances are rising for another rate cut this year.

If interest rates are cut, it will be more welcome news for both the Adelaide housing market and the South Australian economy generally.

Dr Andrew Wilson is Domain Group senior economist. Twitter: @DocAndrewWilson