Auction Rates Slowed By Sydney Lockdown
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Auction Rates Slowed By Sydney Lockdown

However a number of records continued to tumble.

By Kanebridge News
Mon, Jul 5, 2021 10:12amGrey Clock 2 min

Impacted by COVID restrictions in Sydney, school holidays and the onset of winter, national auction numbers were lower over the weekend.

However, despite the aforementioned hurdles, it was a record day for July with 1825 homes auctioned, nearly double the 940 listed over the same weekend last year.

The national market reported another strong clearance rate at 79.8%, which, although lower than the previous weekend’s 82.5% is significantly higher than the 66.1% reported over the same weekend last year.

All capitals reported declines in clearance rates, when compared to the previous Saturday, with the exception of Adelaide that was 0.7% higher.

COVID related withdrawals dragged the Sydney market to a year low with the NSW capital recording a clearance rate of 76.9% on Saturday – well below the previous weekend’s 83.0% and just ahead of the 75.4% recorded over the same weekend last year.

A significant 17.5% of listed auctions were reported as withdrawn on Saturday.

Sydney reported a July record 792 auctions on Saturday was significantly lower than the previous weekend’s 958 but well above the 470 recorded over the same weekend last year.

Further, Sydney recorded a median price of $1,500,000 for houses sold at auction at the weekend – marginally lower than the $1,550,000 reported over the previous Saturday but 11.9% higher than the $1,341,000 recorded over the same weekend last year.

Melbourne performed strongly, despite easing clearance rates.

A total of 853 homes were listed to go under the hammer on Saturday, well below last weekend’s pre-holiday 1320 auctions, however still a record number for a July Saturday.

Melbourne recorded a clearance rate of 76.9% – lower than the previous weekends 79.0% but higher than the 63.2% recorded over the same weekend last year.

The Victorian capital saw a median price of $1,092,000 for houses sold at auction at the weekend – higher than the $1,000,000 recorded over the previous weekend and 32.8% higher than the $822,000 of the same weekend last year.

Data powered by Dr Andrew Wilson, My Housing Market.

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House values continued to fall last month, but the pace of decline has slowed, CoreLogic reports.

In signs that the RBA’s aggressive approach to monetary policy is making an impact, CoreLogic’s Home Value Index reveals national dwelling values fell -1.0 percent in November, marking the smallest monthly decline since June.

The drop represents a -7.0 percent decline – or about $53,400 –  since the peak value recorded in April 2022. Research director at CoreLogic, Tim Lawless, said the Sydney and Melbourne markets are leading the way, with the capital cities experiencing the most significant falls. But it’s not all bad news for homeowners.

“Three months ago, Sydney housing values were falling at the monthly rate of -2.3 percent,” he said. “That has now reduced by a full percentage point to a decline of -1.3 percent in November.  In July, Melbourne home values were down -1.5 percent over the month, with the monthly decline almost halving last month to -0.8%.”

The rate of decline has also slowed in the smaller capitals, he said.  

“Potentially we are seeing the initial uncertainty around buying in a higher interest rate environment wearing off, while persistently low advertised stock levels have likely contributed to this trend towards smaller value falls,” Mr Lawless said. “However, it’s fair to say housing risk remains skewed to the downside while interest rates are still rising and household balance sheets become more thinly stretched.” 

The RBA has raised the cash rate from 0.10 in April  to 2.85 in November. The board is due to meet again next week, with most experts still predicting a further increase in the cash rate of 25 basis points despite the fall in house values.

Mr Lawless said if interest rates continue to increase, there is potential for declines to ‘reaccelerate’.

“Next year will be a particular test of serviceability and housing market stability, as the record-low fixed rate terms secured in 2021 start to expire,” Mr Lawless said.

Statistics released by the Australian Bureau of Statistics this week also reveal a slowdown in the rate of inflation last month, as higher mortgage repayments and cost of living pressures bite into household budgets.

However, ABS data reveals ongoing labour shortages and high levels of construction continues to fuel higher prices for new housing, although the rate of price growth eased in September and October. 

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