Auction Markets Strain Under Lockdown
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Auction Markets Strain Under Lockdown

High numbers of withdrawals saw the clearance rate dip at the weekend.

By Kanebridge News
Mon, Jul 26, 2021 10:11amGrey Clock 2 min

While Auction numbers remain high – with 1944 listings reported on Saturday, July 24 – the national clearance rate suffered due to COVID-related lockdowns falling to 77.3% when compared to the previous weekend’s 80.5%, the lowest results of the year.

Clearance rates were lower in all capitals on Saturday – with Sydney and Melbourne experiencing a high volume of withdrawals – with the exception of Canberra.

In Sydney, auction numbers were sharply low – due to the COVID lockdown.

A total of 566 homes were reported as auctioned on Saturday which was well below the 872 July record set last weekend – the lowest reported on a non-holiday weekend since February 13 this year.

The clearance rate was also lower, falling to a year low 75.1% compared to the previous weekend’s 78.0%. However, it remained higher than the 70.4% recorded over the same weekend last year.

A total of 24% of reported auctions were withdrawn.

The NSW capital recorded a median price of $1,532,500 for houses sold at auction at the weekend which was lower than the $1,603,000 reported over the previous Saturday but 17.7% higher than the $1,302,500 recorded over the same weekend last year.

In turn, Melbourne’s auction market held the line on Saturday, producing relatively strong results.

The Victorian capital recorded a robust 73.0% clearance rate at the weekend – close to the previous weekend’s 73.2% but well ahead of the 47.7% recorded over the same weekend last year.

The clearance rate was again impacted by 30.6% of auctions withdrawn.

A total of 1120 homes were listed to go under the hammer on Saturday, ahead of last weekend’s previous record 1061 auctions and significantly higher than the 527 auctions over the same weekend last year.

Melbourne recorded a median price of $938,000 for houses sold at auction at the weekend which was lower than the $992,500 recorded over the previous weekend but 9.4% higher than the $857,000 recorded over the same weekend last year.

Data powered by Dr Andrew Wilson, My Housing Market.



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Leaders in Australia’s property industry are calling on the RBA to hit the pause button on further interest rate rises following yesterday’s announcement to raise the cash rate to 4.1 percent.

CEO of the REINSW, Tim McKibbin, said it was time to let the 12 interest rate rises since May last year take effect.

“The REINSW would like to see the RBA hit pause and allow the 12 rate rises to date work their way through the economy. Property prices have rebounded because of supply and demand. I think that will continue with the rate rise,” said Mr McKibbin.  

The Real Estate Institute of Australia  today released its Housing Affordability Report for the March 2023 quarter which showed that in NSW, the proportion of family income required to meet the average loan repayments has risen to 55 percent, up from 44.5 percent a year ago.

Chief economist at Ray White, Nerida Conisbee, said while this latest increase would probably not push Australia into a recession, it had major implications for the housing market and the needs of ordinary Australians.

“As more countries head into recession, at this point, it does look like the RBA’s “narrow path” will get us through while taming inflation,” she said. 

“In the meantime however, it is creating a headache for renters, buyers and new housing supply that is going to take many years to resolve. 

“And every interest rate rise is extending that pain.”

In a speech to guests at Morgan Stanley’s Australia Summit released today, Governor Philip Lowe addressed the RBA board’s ‘narrow path’ approach, navigating continued economic growth while pushing inflation from its current level of 6.8 percent down to a more acceptable level of 2 to 3 percent.

“It is still possible to navigate this path and our ambition is to do so,” Mr Lowe said. “But it is a narrow path and likely to be a bumpy one, with risks on both sides.”

However, he said the alternative is persistent high inflation, which would do the national economy more damage in the longer term.

“If inflation stays high for too long, it will become ingrained in people’s expectations and high inflation will then be self-perpetuating,” he said. “As the historical experiences shows, the inevitable result of this would be even higher interest rates and, at some point, a larger increase in unemployment to get rid of the ingrained inflation. 

“The Board’s priority is to do what it can to avoid this.”

While acknowledging that another rate rise would adversely affect many households, Mr Lowe said it was unavoidable if inflation was to be tamed.

“It is certainly true that if the Board had not lifted interest rates as it has done, some households would have avoided, for a short period, the financial pressures that come with higher mortgage rates,” he said. 

“But this short-term gain would have been at a much higher medium-term cost. If we had not tightened monetary policy, the cost of living would be higher for longer. This would hurt all Australians and the functioning of our economy and would ultimately require even higher interest rates to bring inflation back down. 

“So, as difficult as it is, the rise in interest rates is necessary to bring inflation back to target in a reasonable timeframe.”

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