Auction Markets Feel COVID’s Bite
Tightened restrictions clearly impacted auction markets in Australian capitals.
Tightened restrictions clearly impacted auction markets in Australian capitals.
A total of 1872 auctions were reported nationally at the weekend (August 14), well below the previous weekend’s record August offering of 2100 but above the 725 auctioned over the same weekend last year.
The steep decline in national listings was largely caused by Sydney and Melbourne’s COVID lockdowns, listing 472 and 1138 auctions respectively.
The national clearance rate fell at the weekend down to 78.2% from 81.5% the previous weekend.
Sydney reported a strong clearance rate of 83.0% at the weekend – equal to last weekend’s result and well ahead of the 65.9% recorded over the same weekend last year.
It marks the first time the NSW capital has recorded consecutive weekend clearance rates above 80% since June, however it reflects fewer choices available for buyers.
Sydney recorded a median price of $1,626,250 houses sold at auction at the weekend – lower than the 1,695,000 reported the previous Saturday but 22.3% higher than last year’s figure.
Melbourne’s auction market tracked backwards reflecting the impact of lockdown restrictions.
The Victorian capital recorded a clearance rate of 66.0% on Saturday, well below the previous weekend’s 71.7%.
The result is Melbourne’s lowest clearance rate since October 17 2020, impacted by a high number of withdrawals – up to 41.5% from the previous weekend’s 29.5%
While listing numbers fell from 1301 to 1138, there is still considerably more volume in the market than this time last year, the corresponding 2020 weekend reporting just 124 auctions.
Melbourne recorded a median price of $1,085,00 houses sold a auction at the weekend – higher than the $960,000 of the previous weekend and 39.6% above the same weekend last year.
Data powered by Dr Andrew Wilson, My Housing Market.
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The insurance premium gap between flood affected and non-flood affected homes is significant
Climate change is already affecting home values due to the impact of more severe weather events and rising home insurance premiums, and the cost of building is likely to rise as regulatory changes designed to enhance climate resilience alter building codes and zoning laws, according to a new report.
The National Housing Supply and Affordability Council describes climate change as an emerging trend that is raising the cost and complexity of supplying more housing. In its newly released State of the Housing System report, the council discusses how climate change is reducing the value of some homes when major weather events cause flooding or other natural disasters.
“The price differential between flood-affected and non-flood affected homes has been estimated to be up to 35 percent a year after a flooding event,” the report says. “Furthermore, the RBA estimates around 7.5 percent of properties are in areas that could experience price falls of at least 5 percent due to climate change by 2050.”
More than one million households are struggling to afford home insurance, and rates of non-insurance are increasing due to the cost. For example, the Australian Competition and Consumer Commission estimated that 40 percent of homes in Northern Western Australia were uninsured in 2020.
“Climate change is causing home insurance premiums to rise across Australia, adding to already elevated housing costs. Homeowners in areas considered at–risk of natural disasters are expected to see insurance premiums rise further or have difficulty obtaining insurance due to heightened risks.”
More frequent and severe weather events such as cyclones and bushfires, as well as coastal erosion and flooding from rising sea levels, present risks to housing safety. More than 3,000 homes were lost in the 2019-20 bushfire season, causing $2.3 billion in insurance losses. The report says the predicted direct cost of natural disasters to the economy and housing will be $35.2 billion per year by 2050.
Climate change and net-zero targets could raise the cost of building new homes, the report says. “Regulatory changes to enhance climate resilience will alter building codes and zoning regulations.
Developers facing higher compliance costs may have difficulties meeting updated standards, potentially delaying or reducing housing availability.”
However, the report says the increased cost of building a home with climate-resistant materials and eco-friendly features is more than offset by lower energy costs over a property’s lifetime. The current minimum energy efficiency requirements within the National Construction Code are estimated to deliver a household–level benefit-to-cost ratio of 1.37, according to the report.
This stylish family home combines a classic palette and finishes with a flexible floorplan
Just 55 minutes from Sydney, make this your creative getaway located in the majestic Hawkesbury region.