Buyers Shrug Off Worries In Auction Market
Inflation and rate rise rumours no worry for buyers.
2 min
Another big weekend for auctions saw Sydney and Melbourne’s markets revive following a flurry of activity — closing out the highest reported clearance rates in both markets since last spring.
The national auction market reported a clearance rate of 81.6% at the weekend — higher than the 79.1% reported over the previous weekend, yet lower than the 84.0% marked over the same weekend last year.
It comes as the national auction figures ascended to 1977 auctions from the previous weekend’s 1362 — and well ahead of the 1391 reported the same weekend last year.
Sydney has reported another strong result of 79.5% at the weekend — slightly down on the 80.4% reported last weekend but still significantly below the 89.1% recorded over the same weekend last year.
Further, the NSW capital recorded 784 homes listed for auction at the weekend — up on the 563 listed the previous weekend and a February record.
Sydney recorded a median price of $1,835,000 for houses sold at auction at the weekend which was higher than the $1,760,000 reported over the previous weekend and 20.3% higher than the $1,525,000 recorded over the same weekend last year.
In Melbourne, buyers continued to engage in the market in consistent numbers.
The Victorian capital saw a clearance rate of 72.3% — lower than last weekend’s 74.0% and below the 79.8% recorded this time last year.
A total of 888 homes were reported listed for auction at the weekend – well above last weekend’s 491 but also significantly higher than the 698 auctions over the same weekend last year.
Melbourne recorded a median price of $1,090,000 for houses sold at auction at the weekend which was higher than last weekend’s $914,500 and 9.8% higher than the $992,000 recorded over the same weekend last year.
Data powered by Dr Andrew Wilson, My Housing Market.
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New research suggests spending 40 percent of household income on loan repayments is the new normal
3 min
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.
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