Properties are taking longer to sell and vendor discounting has increased, according to data from CoreLogic. In the three months to July, the median days on market was 32, up from a low of 20 days over the three months to November.
Clearance rates also slowed across the country through July, down to an average of 53.3 per cent by the end of the month.The clearance rate for the equivalent period in 2021 was 74.4 per cent.
However, clearance rates have already seen an improvement in the first week of August, with CoreLogic economist Kaytlin Ezzy reporting that Sydney’s preliminary clearance rate was more than 60 per cent for the first time since late May. That was on the back of the quietest auction week since mid July, with 1,471 homes auctioned across Australia’s combined capital cities.
Sydney offered just 476 homes for auction, down from 624 properties a week earlier.
In other states, Brisbane held 153 auctions, Adelaide had 146 and Canberra 67.
Following the devastation of recent flooding, experts are urging government intervention to drive the cessation of building in areas at risk.
RMIT expert says a conflation of factors is making the property market hard than ever to predict
A leading property academic has described navigating the current Australian housing market ‘like steering a ship through a thick fog while trying to avoid obstacles’.
Lecturer in RMIT’s School of Property Construction and Project Management Dr Woon-Weng Wong said the combination of consecutive interest rate rises aimed at combating high inflation, higher property prices during the pandemic and cost of living pressures such as the end of the fuel excise that occurred this week made it increasingly difficult for those looking to enter or upgrade to find the right path.
“Property prices grew by approximately 25 percent over the pandemic so it’s unsurprising that much of that growth ultimately proved unsustainable and the market is now correcting itself,” Dr Wong says. “Despite the recent softening, the market is still significantly above its long-term trend and there are substantial headwinds in the coming months. Headline inflation is still red hot, and the central bank won’t back down until it reins in these spiralling prices.”
This should be enough to give anyone considering entering the market pause, he says.
“While falling house prices may seem like an ideal situation for those looking to buy, once the high interest rates, taxes and other expenses are considered, the true costs of owning the property are much higher,” Dr Wong says.
“People also must consider time lags in the rate hikes, which many are yet to feel to brunt of. It can take anywhere from 6 to 24 months before an initial change in interest rates eventually flows on to the rest of the economy, so current mortgage holders and prospective home buyers need to take this into account.”