COVID Withdrawals Drag Clearance Rates Down
A deluge of sellers brought auction activity to unprecedented levels.
A deluge of sellers brought auction activity to unprecedented levels.
A steady stream of sellers continues to flood national auction markets in record numbers as the winter selling season kicked off on Saturday June 5.
A total of 2697 homes were reported listed by the national auction capitals on Saturday – higher than the previous weekends 2505 – a record June offering and the second highest for the year so far.
National clearance rates, however, eased once again, reflecting the surge in listings alongside high withdrawals in a Melbourne market impacted by the COVID-related lockdown measures.
Saturday’s national clearance rate of 80.7% was the lowest of the year so far, below the previous weekend’s 82%.
The Sydney auction marked hosted another remarkable number of listings on Saturday to smash the June record for the number of properties auctioned. The city reported 1048 auctions on Saturday, higher than the previous weekend’s 981, and the second highest of the year so far.
The clearance rate lowered to 80.8% in Sydney on Saturday, lower than the previous weekend’s 82.2% but higher than the 57.9% recorded over the same weekend last year.
Despite the result being the lowest for the Harbour City this year, it marked the 17th consecutive weekend of clearance rates above 80%.
Sydney recorded a median price of $1,605,000 for houses sold at auction at the weekend which the same as reported over the previous Saturday but 17.8% higher than the $1,362,500 recorded over the same weekend last year.
Melbourne reported a clearance rate of 72.2% which was lower than the 76.5% recorded the previous weekend and the lowest result since the 66.9% recorded over October 24th last year – also impacted by lockdown at that time.
Further, Melbourne reported a remarkable 1379 auctions on Saturday which was well ahead of the 1272 conducted the previous weekend and the second highest for the year so far.
Melbourne recorded a median price of $1,046,000 for houses sold at auction on the weekend which was higher than the $987,500 recorded over the previous weekend and 25.6% higher than the $833,000 recorded over the same weekend last year.
Data powered by Dr Andrew Wilson of My Housing Market.
This stylish family home combines a classic palette and finishes with a flexible floorplan
Just 55 minutes from Sydney, make this your creative getaway located in the majestic Hawkesbury region.
First time buyers determined to enter the Australian property market are taking creative approaches as interest rates steady
Aspiring first home buyers are increasingly pooling their resources, adopting new strategies and making compromises to get themselves onto the property ladder, according to research from Westpac. About 56 percent of buyers surveyed are planning to buy their first property jointly with their partner compared to 40 percent three years ago. Three in four buyers say they are willing to compromise on location, up nine percent from three years ago, and 47 percent are willing to pay lenders mortgage insurance to buy their first home sooner.
Additionally, one in two first home hopefuls are considering ‘rentvesting’, whereby they purchase an investment property first ahead of a home for themselves. In this scenario, buyers typically continue renting in expensive lifestyle locations where they want to live and buy an investment property in more affordable locations, often on the outskirts of major cities or in regional areas.
The 2024 Westpac Home Ownership Report, released this month, is based on a survey of 2,015 Australians conducted in January. The report revealed increasing intentions to buy among all types of buyers, with 44 percent intending to buy in the next five years, up from 35 percent in July 2023. This may reflect expectations that interest rates have peaked, with the Reserve Bank keeping rates on hold since December.
Among first home buyers specifically, there was a slight decline in purchasing intention over the next five years, with 86 percent delaying buying a home due to cost-of-living pressures. The survey also found that more people are planning to buy an investment property, which is reflected in recent finance data from the Australian Bureau of Statistics showing a 20 percent increase in the value of investor loans issued over the past year. Additionally, more people are planning to upsize their homes or renovate their existing homes.
Westpac managing director of mortgages Damien MacRae said first home buyers “are becoming more ruthless with their goals”. “They understand it’s a big task, but they are determined to break into the market and are willing to compromise to get there,” Mr MacRae said.
Buyers still prefer houses, but there has been a five percent decline in this preference since 2021 and a seven percent increase for apartments. Preference for a townhouse, or house and land packages, has increased markedly. “Buyers are casting their expectations wider, willing to compromise on location and are forgoing everyday luxuries like food delivery. They are also more inclined to relocate and move to apartment living.”
The latest Westpac-Melbourne Institute Consumer Sentiment Index released this week shows the ‘time to buy a dwelling’ index rose 4.9 percent to 77.8 out of 100 this month, which is a 15-month high, but still relatively weak overall. Buyer sentiment is notably stronger in Victoria at 84.3, with Westpac senior economist Matthew Hassan pointing to softening home values over the past four months.
In contrast, the NSW index is at 73.3 out of 100, likely reflecting affordability challenges in Australia’s most expensive market. “Nearly 70 percent of consumers expect housing prices to continue rising in the year ahead,” Mr Hassan added.
Just 55 minutes from Sydney, make this your creative getaway located in the majestic Hawkesbury region.
This stylish family home combines a classic palette and finishes with a flexible floorplan