Major Capitals Survive Super Saturday

The pre-Easter super Saturday of auctions has provided sellers with generally positive results this year, despite a deluge of listings.

The national auction market reported a clearance rate of 76.0% at the weekend — similar to the previous weekend’s 74.9% yet lower than the 86.2% recorded over the same weekend last year.

National auction numbers week higher at the weekend reflecting — as expected due to the pre-Easter holiday surge — with 3157 reported compared to the previous weekend’s 2551 and the 1909 reported over the same weekend last year.

Despite the market passing the most difficult test of the year so far, Economist Dr Andrew Wilson expects things to slow down.

“Markets will be relatively subdued over the remainder of April due to lengthy holiday distractions and the possibility of the commencement of a lengthy federal election campaign,” said Dr Wilson in his latest auction report.

Sydney reported a clearance rate of 69.4% at the weekend — almost the same as the previous weekend’s 69.7% but well below the 82.4% recorded over the same weekend last year.

The weekend saw a year-to-date high of 1214 auctions — well ahead of the previous weekend’s 958 and the previous year’s 765 auctions recorded.

The NSW capital recorded a median price of $1,815,000 for houses sold at auction at the weekend — higher than the $1,800,000 reported over the previous weekend and the same weekend last year’s $1,550,000.

The Melbourne market survived one of the biggest auction days of the year, reporting a clearance rate of 69.8% on Saturday — just below the previous weekend’s 71.7% and lower than the 79.1% recorded over the same weekend last year.

The Victorian capital saw 1505 homes reported for auction over the weekend — significantly above the previous weekend’s 1259 and the 785 listed over the same weekend last year.

Melbourne recorded a median price of $1,105,500 for houses sold at auction at the weekend which was lower than last weekend’s $1,134,000 – but 16.9% % higher than the $945,750 reported over the same weekend last year.

Data powered by Dr Andrew Wilson, My Housing Market.

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.

Major Capitals Survive Super Saturday

The pre-Easter auction rush didn’t dampen clearance rates.

New research suggests spending 40 percent of household income on loan repayments is the new normal