After a strong showing last week, auction rates around the capitals have dipped once again, reports CoreLogic.
After a nine-week high last weekend, activity is down -5.1 percent with a combined total of 1,904 homes scheduled for auction around the capitals. Canberra was the exception to the rule, becoming the only capital to experience a week-on-week growth in auction numbers.
In Melbourne, there are 778 auctions on the books, a drop of -6.5 percent from last week’s total of 832, while Sydney’s 773 homes listed is only slightly down on last week’s numbers of 779 homes. It’s a 80.9 percent improvement in Melbourne and 27.3 percent increase in Sydney on this time last year, when both capitals were feeling the effects of extended lockdowns.
The smaller capitals are experiencing greater slumps, with Brisbane seeing a -20.3 percent drop on last week to 126 homes and Adelaide down -14 percent to 123. In Perth, there are eight auctions scheduled, while in Tasmania, just one home is set to go under the hammer.
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.”