Auction Markets Lower On Federal Election Day
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Auction Markets Lower On Federal Election Day

Clearance rates continue to track at year-low levels.

By Terry Christodoulou
Mon, May 23, 2022 9:20amGrey Clock 2 min

With buyers distracted by the federal election, property auction clearance rates were generally lower at the weekend across the country.

The national auction market reported a clearance rate of 71.4% at the weekend — the same as reported last weekend but lower than the 82.0% recorded over the same weekend last year. Clearance rates continue to track at year-low levels.

National auction numbers were predictably lower at the weekend due to distractions on election day. Only 1137 homes were reported listed compared to the previous weekend’s 2372 and well below the same weekend last year’s number of 2333.

In Sydney, there was a small lift in clearance rates, up to 68.9% at the weekend — higher than the 64.1% recorded last weekend but well down on the 81.5% recorded this time last year.

The lift in clearance rates can be attributed to only 335 homes being listed for auction. Lower than the 810 auctioned the weekend prior and well below last year’s efforts of 949.

Sydney recorded a median price of $1,600,000 for houses sold at auction at the weekend which was lower than the $1,690,000 recorded last weekend and 1.2% lower than the same weekend last year’s $1,620,00.

Melbourne’s home auction market weakened at the weekend, reported a year-to-date low of 63.8% — a drop from the 68.78% recorded over the previous weekend and well below the 76.9% recorded over the same weekend last year.

The Victorian capital reported 594 homes listed at the weekend – lower than the 1165 reported over the previous Super Saturday weekend and well below the 1117 listed over the same weekend last year.

Melbourne recorded a median price of $1,030,000 for houses sold at auction at the weekend which was lower than the $1,203,000 reported last weekend but 3.5% higher than the $995,500 recorded over the same weekend last year.

Data powered by Dr Andrew Wilson, My Housing Market.

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Amid looming rate rises, there are reasons to be cheerful as mortgage holders head into 2023

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Mortgage holders should brace themselves for more pain as the Reserve Bank of Australia board prepares to meet this afternoon for the first time this year.

Most economists and the major banks are predicting a rise of 25 basis points will be announced, although the Commonwealth Bank suggested yesterday that the RBA may take the unusual step of a 40 basis point rise to bring the interest rate up to a more conventional 3.5 percent. This could present the RBA with the chance to put further rate rises on hold for the next few months as it assesses the impact of tightening monetary policy on the economy.

The decision by the RBA board to make consecutive rate rises since April last year is an attempt to wrestle inflation down to a more manageable 3 or 4 percent. The Australian Bureau of Statistics reports that the inflation rate rose to 7.8 percent over the 2022 December quarter, the highest it has been since 1990, reflected in higher prices for food, fuel and construction.

Higher interest rates have coincided with falling home values, which Ray White chief economist Nerida Conisbee says are down 6.1 percent in capital cities since peaking in March 2022. The pain has been greatest in Sydney, where prices have dropped 10.8 percent since February last year. Melbourne and Canberra recorded similar, albeit smaller falls, while capitals like Adelaide, which saw property prices fall 1.8 percent, are less affected.

Although prices may continue to decline, Ms Conisbee (below) said there are signs the pace is slowing and that inflation has peaked.

“December inflation came in at 7.8 per cent with construction, travel and electricity costs being the biggest drivers. It is likely that we are now at peak,” Ms Conisbee said. 

“Many of the drivers of high prices are starting to be resolved. Shipping costs are now down almost 90 per cent from their October 2021 peak (as measured by the Baltic Dry Index), while crude oil prices have almost halved from March 2022. China is back open and international migration has started up again. 

“Even construction costs look like they are close to plateau. Importantly, US inflation has pulled back from its peak of 9.1 per cent in June to 6.5 per cent in December, with many of the drivers of inflation in this country similar to Australia.”

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