Clearance Rates Hold Firm Against COVID
The national clearance rate lifted at the weekend.
2 min
Despite Sydney being in the midst of its strictest COVID lockdown to date, the weekend auction market produced strong results for sellers.
July ended with yet another record Saturday offering for the month with all capitals reporting sharp increases in listings when compared to the previous weekend.
A total of 2203 homes were listed nationally on Saturday – up on last weekend’s 1944 and well ahead of the 919 auctioned over the same weekend last year.
The high listing numbers failed to slow the clearance rate with – 83.6% nationally – well ahead of the previous weekend’s 77.3% and the highest recorded since mid-April.
Sydney’s auction market bounced back despite lockdown woes with 623 auctions – up on last weekend’s 566. Although it is much lower than the record levels set earlier in the month.
The weekend clearance rate was also sharply higher at the weekend with the NSW capital recording 79.1% – up on last weekend’s 75.1% and higher than the 71.5% recorded over the same weekend last year.
Sydney recorded a median price of $1,700,661 for houses sold at auction at the weekend which was well above the $1,532,500 reported over the previous Saturday and 35.9% higher than the $1,251,000 recorded over the same weekend last year.
The Melbourne market saw more strong results with a 77.6% clearance rate at the weekend – sharply higher than last weekend’s 73.0%.
The strong results come in spite of a surge in listings to yet another monthly Saturday record for July – the Victorian capital recording 1264 homes listed to go under the hammer, well ahead of last weekend’s 1120.
Melbourne recorded a median price of $967,000 for houses sold at auction at the weekend which was higher than the $938,000 recorded over the previous weekend and 19.9% higher than the $806,750 recorded over the same weekend last year.
Data Powered by Dr Andrew Wilson of 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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