September Auctions Finish Strong
As lockdowns look to ease, the market seems in good stead.
2 min
The first month of the spring weekend auction market has concluded with more remarkable results despite ongoing covid restrictions in most capitals.
Auction numbers have been impacted by the restrictions and were lower at the weekend with a total of 1155 homes offered nationally compared to 1272 the previous weekend.
The national clearance rate fell marginally at the weekend following a 5-month high – down from 84.9% to 83.8%.
All capitals reported clearance rates above 80%, with the exception of Melbourne, just below at 79.3%.
Sydney has shown no signs of slowing down, recording a clearance rate of 85.2% at the weekend following the previous weekend’s 85.1%. It is the eighth consecutive weekend the NSW capital has recorded a clearance rate above 80%.
Auction numbers increased for the fifth consecutive Saturday in Sydney with 641 homes offered for sale compared to the previous weekend’s 569. This figure remained lower than the 732 listed over the same weekend last year.
Sydney recorded a median price of $1,744,000 for houses sold at auction at the weekend — higher than the $1,690,500 reported over the previous Saturday and 30.4% higher than the $1,337,500 recorded over the same weekend last year.
Melbourne saw a lift in its clearance rate – up to 79.3% after the previous weekend’s 72.3% — due to a lower proportion of withdrawals at 20.8% compared to the previous weekend’s 28.7%.
Listings fell sharply at the weekend with 269 auctions compared to the previous weekend 434 but well ahead of the 32 auctioned over the same weekend last year.
Melbourne recorded a median price of $870,500 for houses sold at auction at the weekend which was well below the $1,000,250 recorded over the previous weekend and similar to the $850,250 recorded over the same weekend last year.
With restrictions set to ease as the market heads deeper into spring, more strong results are forecast.
Data Powered by Dr Andrew Wilson of My Housing Market.
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The insurance premium gap between flood affected and non-flood affected homes is significant
2 min
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.
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