Autumn Selling Season Officially Begins

Home auction markets have commenced the autumn selling season with solid results despite reporting generally lower than February.

Severe weather events also distracted activity in some markets — particularly Brisbane — with listings and clearance rates well down on the week before in the Queensland capital from 78.7% the weekend prior to 65.3%.

The national auction market reported a year low clearance rate of 73.5% at the weekend, well down on the previous weekend’s 77.9% and significantly below the 88.5% recorded over the same weekend last year.

National auction volume was also down with 2377 reported listed compared to the previous weekend’s 2627 but well ahead of the 1232 listed the same Saturday last year.

The Sydney auction market reported yet another strong clearance rate despite weather distractions.

Clearance rates have continued to track above the results recorded at the end of 2021 despite record level early-season listings.

The NSW capital recorded a clearance rate of 76.6% at the weekend — lower than the 78.8% reported over the previous weekend and below the 86.6% record over the same weekend last year.

Sydney reported 841 auction listings which, although below the previous weekend’s February record of 965, was well ahead of the 665 reported for the same weekend last year.

Sydney recorded a median price of $1,915,000 for houses sold at auction at the weekend which was higher than the $1,755,000 reported over the previous weekend and 12.4% higher than the $1,704,000 recorded over the same weekend last year.

In Melbourne, the capital reported a clearance rate of 73.8% on Saturday — higher than last weekend’s 71.4% but well below the 80.6% recorded over the same weekend last year.

Melbourne reported 1210 homes listed for auction at the weekend, lower than last weekend’s 1288 but predictably significantly higher than the 405 auctioned over the same weekend last year, which was a Labour Day holiday weekend.

The Victorian capital recorded a median price of $1,170,000 for houses sold at auction at the weekend which was lower than last weekend’s $1,187,000 but 6.4% higher than the $1,100,000 recorded over the same weekend last year.

Data powered by Dr Andrew Wilson, My Housing Market.

Requiring more than 30 percent of household income to service a home loan has long been considered the benchmark for ‘housing stress’. Yet research shows it is becoming the new normal. The 2024 ANZ CoreLogic Housing Affordability Report reveals home loans on only 17 percent of homes are ‘serviceable’ if serviceability is limited to 30 percent of the median national household income.

Based on 40 percent of household income, just 37 percent of properties would be serviceable on a mortgage covering 80 percent of the purchase price. ANZ CoreLogic suggest 40 may be the new 30 when it comes to home loan serviceability. “Looking ahead, there is little prospect for the mortgage serviceability indicator to move back into the 30 percent range any time soon,” says the report.

“This is because the cash rate is not expected to be cut until late 2024, and home values have continued to rise, even amid relatively high interest rate settings.” ANZ CoreLogic estimate that home loan rates would have to fall to about 4.7 percent to bring serviceability under 40 percent.

CoreLogic has broken down the actual household income required to service a home loan on a 6.27 percent interest rate for an 80 percent loan based on current median house and unit values in each capital city. As expected, affordability is worst in the most expensive property market, Sydney.

Sydney

Sydney’s median house price is $1,414,229 and the median unit price is $839,344.

Based on 40 percent serviceability, households need a total income of $211,456 to afford a home loan for a house and $125,499 for a unit. The city’s actual median household income is $120,554.

Melbourne

Melbourne’s median house price is $935,049 and the median apartment price is $612,906.

Based on 40 percent serviceability, households need a total income of $139,809 to afford a home loan for a house and $91,642 for a unit. The city’s actual median household income is $110,324.

Brisbane

Brisbane’s median house price is $909,988 and the median unit price is $587,793.

Based on 40 percent serviceability, households need a total income of $136,062 to afford a home loan for a house and $87,887 for a unit. The city’s actual median household income is $107,243.

Adelaide

Adelaide’s median house price is $785,971 and the median apartment price is $504,799.

Based on 40 percent serviceability, households need a total income of $117,519 to afford a home loan for a house and $75,478 for a unit. The city’s actual median household income is $89,806.

Perth

Perth’s median house price is $735,276 and the median unit price is $495,360.

Based on 40 percent serviceability, households need a total income of $109,939 to afford a home loan for a house and $74,066 for a unit. The city’s actual median household income is $108,057.

Hobart

Hobart’s median house price is $692,951 and the median apartment price is $522,258.

Based on 40 percent serviceability, households need a total income of $103,610 to afford a home loan for a house and $78,088 for a unit. The city’s actual median household income is $89,515.

Darwin

Darwin’s median house price is $573,498 and the median unit price is $367,716.

Based on 40 percent serviceability, households need a total income of $85,750 to afford a home loan for a house and $54,981 for a unit. The city’s actual median household income is $126,193.

Canberra

Canberra’s median house price is $964,136 and the median apartment price is $585,057.

Based on 40 percent serviceability, households need a total income of $144,158 to afford a home loan for a house and $87,478 for a unit. The city’s actual median household income is $137,760.

Autumn Selling Season Officially Begins

Solid auction returns mark the start of the new season.

New research suggests spending 40 percent of household income on loan repayments is the new normal