COVID Withdrawals Drag Clearance Rates Down
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COVID Withdrawals Drag Clearance Rates Down

A deluge of sellers brought auction activity to unprecedented levels.

By Kanebridge News
Mon, Jun 7, 2021 10:44amGrey Clock 2 min

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.



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Thousands of Australian companies on the brink of going into administration as EOFY nears

Along with high inflation and weak consumer spending, there’s another key factor pushing a record number of businesses to the edge

By Bronwyn Allen
Fri, Jun 21, 2024 3 min

More than 10,000 companies are expected to have entered external administration by the end of the 2024 financial year, a level not seen for more than a decade. Data just released by the Australian Securities & Investments Commission (ASIC) shows 1,245 companies became insolvent in May, the highest monthly number this financial year. At present, a total of 9,988 businesses have gone bust in FY24 with data from June yet to be finalised.

Deloitte Access Economics Partner David Rumbens said the surge in business insolvencies this year was a “clear sign of economic distress”.

He commented: “[ASIC] predicts that by the end of the financial year, the number of companies entering external administration will likely exceed 10,000 – a level not seen since 2012-13, in the aftermath of the Global Financial Crisis (GFC).”

Mr Rumbens said the elements contributing to this year’s surge in insolvencies include high inflation and interest rates, weak consumer spending, and the commencement of more proactive tax debt collection activities by the Australian Taxation Office (ATO).

“One of the key factors contributing to this surge in insolvencies is the [ATO] pursuing debts that were previously put on hold during the COVID-19 pandemic,” he said.

Mr Rumbens cited ATO figures showing collectable debt rose 89 percent in the four years to June 2023. This has particularly impacted small businesses, which account for approximately 65 percent of the total debt owed at about $33 billion. “But more strictly enforced debt collection is coming at a time of tough economic conditions. High interest rates and cost-of-living pressures have weakened consumer spending, particularly in more discretionary components of spending.”

The construction sector has seen the highest number of insolvencies by far in FY24, mirroring the trend of FY23. Of the 9,988 insolvencies to date, 2,711 of them are in the building sector, which faces several challenges. These include a substantial lift in the cost of construction materials that is well above inflation and has made many fixed-price contracts signed within the past few years unprofitable. There is also a significant labour shortage that is delaying new home completions and new project starts, and also adding higher costs to projects.

“The construction sector has been hit particularly hard, with construction firms leading industry insolvencies in every quarter since mid-2021,” Mr Rumbens said. “They have accounted for approximately 25 percent of all insolvencies during this period. The residential construction sector is already facing a backlog of projects to complete as a result of skills and material shortages in recent years, and increased insolvencies in the sector may only exacerbate the problem of housing shortages.”

The ASIC data shows the next biggest industry affected is ‘other services’, which includes a broad range of personal care services such as hair, beauty, dietary, and death care services. The sector has seen 939 insolvencies in FY24. Retail trade is next with 687 insolvencies, followed by professional, scientific and technical services with 585 insolvencies.

“The food & accommodation sector has also experienced a wave of insolvencies. High input costs, worker shortages, and weak consumer sentiment have put pressure on businesses. Specifically, in March, cafés, restaurants, and takeaway businesses accounted for 5.5 percent of total business insolvencies, the highest proportion in the last three years.”

Mr Rumbens pointed out that while the number of insolvencies was high, it represents a lower share of the business sector at 0.33 percent than it did in FY13 when it was 0.53 percent. “This reflects the increase of registered companies in Australia, which has risen from just over two million to 3.3 million since 2012-13. Even so, the continued lift in insolvencies since 2021 highlights the difficult conditions many businesses face at present.”

 

 

MOST POPULAR
11 ACRES ROAD, KELLYVILLE, NSW

This stylish family home combines a classic palette and finishes with a flexible floorplan

35 North Street Windsor

Just 55 minutes from Sydney, make this your creative getaway located in the majestic Hawkesbury region.

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