Cooling auction results over the weekend point to a cautious market
High inflation and interest rate hikes hint at buyer uncertainty as clearance rates flatten
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Auction clearance rates were slightly weaker across Australian capitals over the weekend, preliminary data from CoreLogic shows.
There were 1,742 homes up for sale in the national capitals, down -4 percent on the previous week’s offering of 1,815 homes. Clearance rates were also a little flat, at 61.4 percent.
This time last year, when 2,940 homes went to auction around the capitals, 78.3 percent sold.
The year-on-year contrast is perhaps greatest in the nation’s capital, Canberra, going from a clearance rate of 91.2 percent last year to 56.1 percent.
Sydney recorded a 81.5 percent clearance rate this time last year, compared with 61.7 percent this week. In Melbourne, the gap was smaller, with 74.9 percent of homes selling at auction this time last year, compared with 63.8 percent this week.
Adelaide and Perth are also experiencing clearance rates considerably lower than those achieved in 2021.
Auction results continue to fluctuate as the impact of five consecutive interest rate rises and cost of living pressures make an impression on household budgets.
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The Westpac-Melbourne Institute Consumer Sentiment Index slipped to 84.6 in September from 85.0 in August
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SYDNEY—Australian consumer confidence fell in September amid concerns about job security as economic growth slows to a crawl.
The Westpac-Melbourne Institute Consumer Sentiment Index slipped 0.5% to 84.6 in September from 85.0 in August.
While cost-of-living pressures are becoming a little less intense and fears of further interest rate rises have eased, consumers are becoming more concerned about where the economy may be headed and what this could mean for jobs, said Westpac’s Head of Australian Macro-Forecasting, Matthew Hassan.
Consumers remain concerned about rising inflation, which is stoking concerns that interest rates may rise further, Hassan added.
The report comes a week after data showed the economy barely registered a pulse in the second quarter as consumer spending dropped sharply.
On-year GDP growth in the second quarter was the weakest since the early 1990s, excluding the pandemic years.
At the same time, the Reserve Bank of Australia continued to signal that interest rate cuts are unlikely in the near term, while adding that under certain circumstances a further hike in interest rates may be needed.
The RBA remains concerned about price growth, with core inflation remaining stubbornly elevated at nearly 4.0% on year in the second quarter.
Still, while consumers are downbeat, economists expect spending to regather momentum over coming quarters as income tax cuts delivered in July boost household budgets.
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