Clearance Rates Are Driven Down By Flood Of Listings
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Clearance Rates Are Driven Down By Flood Of Listings

It’s still a seller’s market.

By Kanebridge News
Mon, Nov 29, 2021 9:06amGrey Clock 2 min

The late season deluge of listings is predictably continuing to push clearance rates down in capitals across the country.

The national clearance rate fell to a three-month low with only Canberra reporting a result above 80% at 87.6% from 112 auctions over the weekend.

The national weekend clearance rate of 76.8% was well below the previous week’s 82.3% and just above the 75.4% recorded over the same weekend last year.

National auction numbers soared again at the weekend rising from the previous Saturday’s 2764 to November record 3165 — and well ahead of the 1740 auctioned over the same weekend last year.

Sydney clearance rates rise despite another record November auction day.

The NSW capital recorded a clearance rate of 77.2% at the weekend which was higher than the previous weekend’s 76.3% but now lower than the 80.8% recorded over the same weekend of 2020.

A record 1234 homes were listed for auction on Saturday — well ahead of the previous weekend’s 1075 and significantly higher than the 781 auctioned over the same weekend last year.

Sydney recorded a median price of $1,702,000 for houses sold at auction at the weekend which was lower than the $1,761,000 reported over the previous Saturday but 21.5% higher than the $1,401,000 recorded over the same weekend last year.

Melbourne’s weekend auction market concluded November with a near record number of listings with 1518 homes listed for auction — well ahead of the 1275 reported the previous weekend and significantly higher than the 736 auctioned over the same weekend last year.

The Victorian capital reported a clearance rate of 69.8% on Saturday which was lower than the previous weekend’s 72.5% and also lower than the 75.6% recorded over the same weekend last year.

Melbourne recorded a median price of $1,119,000 for houses sold at auction at the weekend which was higher than the $1,064,500 recorded over the previous weekend and 12.8% higher than the $992,000 recorded over the same weekend last year.

Data powered by Dr Andrew Wilson, MyHousingMarket.

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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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