Auction Markets Tumble Following Rate Rise
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Auction Markets Tumble Following Rate Rise

With auction numbers low across the country.

By Terry Christodoulou
Mon, May 9, 2022 9:15amGrey Clock 2 min

Following the RBA’s decision to raise official interest rates by 0.25% last week, the capital city auction clearance rates were mostly sharply lower at the weekend.

The national auction market reported a clearance rate of 71.3% — down on last weekend’s 73.1% and well below the 83.1% recorded over the same weekend last year. It was also the lowest national clearance rate reported for the year so far.

National auction numbers also fell sharply with just 1667 homes listed nationally across the weekend compared to the previous weekend’s 2231 and well short of the 2563 reported over the same weekend last year.

Sydney’s auction clearance rates were steady, with listings falling sharply,  reporting just 577 homes for auction over the weekend — well below the 822 auctioned over last weekend and well below 2021’s corresponding weekend total of 1014 listings.

It saw the NSW capital post a clearance rate of 64.6% at the weekend — similar to the 64.5% recorded last weekend but lower than the 83.5% recorded over the same weekend last year.

Sydney recorded a median price of $1,630,000 for houses sold at auction at the weekend which was lower than the $1,765,500 recorded last weekend and now 1.2% lower than the same weekend last year’s $1,650,000.

Melbourne’s market suffered more greatly, with a year-to-date low of 66.4% clearance rate – falling from 71.8% recorded the year prior and significantly lower than the 80.7% of last year’s corresponding weekend.

The Victorian capital saw just 767 homes reported listed at the weekend — well below the 1116 reported over the previous weekend.

Melbourne recorded a median price of $1,075,000 for houses sold at auction at the weekend which was higher than the $1,051,000 reported last weekend and also 2.4% higher than the $1,050,000 recorded over the same weekend last year.

Data powered by Dr Andrew Wilson, My Housing Market.


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Hong Kong Takes Drastic Action to Avert Property Slump

The city’s real-estate market has been hurt by high interest rates and mainland China’s economic slowdown

Fri, Mar 1, 2024 3 min

Hong Kong has taken a bold step to ease a real-estate slump, scrapping a series of property taxes in an effort to turn around a market that is often seen as a proxy for the city’s beleaguered economy.

The government has removed longstanding property taxes that were imposed on nonpermanent residents, those buying a second home, or people reselling a property within two years after buying, Financial Secretary Paul Chan said in his annual budget speech on Wednesday.

The move is an attempt to revive a property market that is still one of the most expensive in the world, but that has been badly shaken by social unrest, the fallout of the government’s strict approach to containing Covid-19 and the slowdown of China’s economy . Hong Kong’s high interest rates, which track U.S. rates due to its currency peg,  have increased the pressure .

The decision to ease the tax burden could encourage more buying from people in mainland China, who have been a driving force in Hong Kong’s property market for years. Chinese tycoons, squeezed by problems at home, have  in some cases become forced sellers  of Hong Kong real estate—dealing major damage to the luxury segment.

Hong Kong’s super luxury homes  have lost more than a quarter of their value  since the middle of 2022.

The additional taxes were introduced in a series of announcements starting in 2010, when the government was focused on cooling down soaring home prices that had made Hong Kong one of the world’s least affordable property markets. They are all in the form of stamp duty, a tax imposed on property sales.

“The relevant measures are no longer necessary amidst the current economic and market conditions,” Chan said.

The tax cuts will lead to more buying and support prices in the coming months, said Eddie Kwok, senior director of valuation and advisory services at CBRE Hong Kong, a property consultant. But in the longer term, the market will remain sensitive to the level of interest rates and developers may still need to lower their prices to attract demand thanks to a stockpile of new homes, he said.

Hong Kong’s authorities had already relaxed rules last year to help revive the market, allowing home buyers to pay less upfront when buying certain properties, and cutting by half the taxes for those buying a second property and for home purchases by foreigners. By the end of 2023, the price index for private homes reached a seven-year low, according to Hong Kong’s Rating and Valuation Department.

The city’s monetary authority relaxed mortgage rules further on Wednesday, allowing potential buyers to borrow more for homes valued at around $4 million.

The shares of Hong Kong’s property developers jumped after the announcement, defying a selloff in the wider market. New World Development , Sun Hung Kai Properties and Henderson Land Development were higher in afternoon trading, clawing back some of their losses from a slide in their stock prices this year.

The city’s budget deficit will widen to about $13 billion in the coming fiscal year, which starts on April 1. That is larger than expected, Chan said. Revenues from land sales and leases, an important source of government income, will fall to about $2.5 billion, about $8.4 billion lower than the original estimate and far lower than the previous year, according to Chan.

The sweeping property measures are part of broader plans by Hong Kong’s government to prop up the city amid competition from Singapore and elsewhere. Stringent pandemic controls and anxieties about Beijing’s political crackdown led to  an exodus of local residents and foreigners  from the Asian financial centre.

But tens of thousands of Chinese nationals have arrived in the past year, the result of Hong Kong  rolling out new visa rules aimed at luring talent in 2022.


Consumers are going to gravitate toward applications powered by the buzzy new technology, analyst Michael Wolf predicts

Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’

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