Auction Markets Steady
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Auction Markets Steady

Figures remain stable despite post-election surge in listings.

By Terry Christodoulou
Mon, May 30, 2022 10:07amGrey Clock 2 min

Auction clearance rates were steady on Saturday despite a forecasted surge in post-election weekend listings.

The national auction market reported a clearance rate of 67.3% at the weekend — lower than the 71.4% reported last weekend and also lower than the 82.2% recorded over the same weekend last year. This weekend’s national figure was the lowest of the year so far.

National auction numbers were higher at the weekend, following last weekend’s election day distractions. A total of 2707 homes were reported listed compared to the previous weekend’s 1137 — higher than the same weekend last year’s 2505 auctions.

Sydney’s market is stable, albeit down on last year’s figures, recording a clearance rate of 66.9% at the weekend — below the 68.9% of last weekend but lower than the 82.2% of the same weekend last year.

A total of 1013 homes were listed for auction in the NSW capital at the weekend — predictably higher than the 335 auctioned last weekend and higher than the 981 of same weekend last year.

Sydney recorded a median price of $1,720,000 for houses sold at auction at the weekend which was well ahead of the $1,600,000 recorded last weekend and 7.2% higher than the same weekend last year’s $1,605,000.

Melbourne’s market saw a small upward shift despite the surge in auction numbers.

The Victorian capital reported a clearance rate of 68.1% on Saturday — higher than the year-low of 63.8% recorded over the previous weekend but lower than the 76.5% recorded over the same weekend last year.

A total of 1320 homes were listed in Melbourne at the weekend — higher than the 594 reported over the previous weekend and higher than the 1272 listed over the same weekend last year.

Melbourne recorded a median price of $1,150,000 for houses sold at auction at the weekend which was higher than the $1,030,000 reported last weekend and 16.5% higher than the $987,500 recorded over the same weekend last year.

Data powered by Dr Andrew Wilson, My Housing Market.



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Along with high inflation and weak consumer spending, there’s another key factor pushing a record number of businesses to the edge

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More than 10,000 companies are expected to have entered external administration by the end of the 2024 financial year, a level not seen for more than a decade. Data just released by the Australian Securities & Investments Commission (ASIC) shows 1,245 companies became insolvent in May, the highest monthly number this financial year. At present, a total of 9,988 businesses have gone bust in FY24 with data from June yet to be finalised.

Deloitte Access Economics Partner David Rumbens said the surge in business insolvencies this year was a “clear sign of economic distress”.

He commented: “[ASIC] predicts that by the end of the financial year, the number of companies entering external administration will likely exceed 10,000 – a level not seen since 2012-13, in the aftermath of the Global Financial Crisis (GFC).”

Mr Rumbens said the elements contributing to this year’s surge in insolvencies include high inflation and interest rates, weak consumer spending, and the commencement of more proactive tax debt collection activities by the Australian Taxation Office (ATO).

“One of the key factors contributing to this surge in insolvencies is the [ATO] pursuing debts that were previously put on hold during the COVID-19 pandemic,” he said.

Mr Rumbens cited ATO figures showing collectable debt rose 89 percent in the four years to June 2023. This has particularly impacted small businesses, which account for approximately 65 percent of the total debt owed at about $33 billion. “But more strictly enforced debt collection is coming at a time of tough economic conditions. High interest rates and cost-of-living pressures have weakened consumer spending, particularly in more discretionary components of spending.”

The construction sector has seen the highest number of insolvencies by far in FY24, mirroring the trend of FY23. Of the 9,988 insolvencies to date, 2,711 of them are in the building sector, which faces several challenges. These include a substantial lift in the cost of construction materials that is well above inflation and has made many fixed-price contracts signed within the past few years unprofitable. There is also a significant labour shortage that is delaying new home completions and new project starts, and also adding higher costs to projects.

“The construction sector has been hit particularly hard, with construction firms leading industry insolvencies in every quarter since mid-2021,” Mr Rumbens said. “They have accounted for approximately 25 percent of all insolvencies during this period. The residential construction sector is already facing a backlog of projects to complete as a result of skills and material shortages in recent years, and increased insolvencies in the sector may only exacerbate the problem of housing shortages.”

The ASIC data shows the next biggest industry affected is ‘other services’, which includes a broad range of personal care services such as hair, beauty, dietary, and death care services. The sector has seen 939 insolvencies in FY24. Retail trade is next with 687 insolvencies, followed by professional, scientific and technical services with 585 insolvencies.

“The food & accommodation sector has also experienced a wave of insolvencies. High input costs, worker shortages, and weak consumer sentiment have put pressure on businesses. Specifically, in March, cafés, restaurants, and takeaway businesses accounted for 5.5 percent of total business insolvencies, the highest proportion in the last three years.”

Mr Rumbens pointed out that while the number of insolvencies was high, it represents a lower share of the business sector at 0.33 percent than it did in FY13 when it was 0.53 percent. “This reflects the increase of registered companies in Australia, which has risen from just over two million to 3.3 million since 2012-13. Even so, the continued lift in insolvencies since 2021 highlights the difficult conditions many businesses face at present.”

 

 

MOST POPULAR
11 ACRES ROAD, KELLYVILLE, NSW

This stylish family home combines a classic palette and finishes with a flexible floorplan

35 North Street Windsor

Just 55 minutes from Sydney, make this your creative getaway located in the majestic Hawkesbury region.

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