Mid-Winter Auctions Slow And Steady
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Mid-Winter Auctions Slow And Steady

The fragile buyer and seller confidence continues to grip the market.

By Kanebridge News
Mon, Jul 18, 2022 10:30amGrey Clock 2 min

The typically chilly winter home auction market produced steady results across the country at the weekend with a reported clearance rate of 60.8% at the weekend which was lower than the 63.2% of last weekend and significantly lower than the 80.5% of the same weekend last year.

Saturday’s result was the lowest national weekend clearance rate since lockdown-impacted results of August 2020.

National auction numbers were higher at the weekend with 1442 listings compared to last weekend’s 1355 — but well below the same weekend last year’s 2179.

The Sydney auction market reported steady auction clearance rates at the weekend, with results still at the lowest level since April 2020.

The NSW capital recorded a clearance rate of 58.0% at the weekend — similar to the 58.7% recorded the previous weekend and well below the 78.0% recorded over the same weekend last year.

Auction numbers were higher at the weekend with 597 reported compared to the previous weekend’s 562 but again well down on the 872 auctioned over the same weekend last year.

Sydney recorded a median price of $1,515,000 for houses sold at auction at the weekend which was lower than the $1,651,000 recorded last weekend and 5.5% lower than the same weekend last year’s $1,603,000

Melbourne’s clearance rates too held steady, albeit low, with a clearance rate of 60.4% on Saturday which was similar to the previous weekend’s 60.4% on Saturday which was similar to the previous weekend’s 60.0% — lower than the 73.2% recorded over the same weekend last year.

The Victorian capital recorded 598 homes listed at the weekend — higher than the 552 reported over the previous weekend but well below the 1061 listed over the same weekend last year.

Melbourne recorded a median price of $923,000 for houses sold at auction at the weekend which was lower than the $1,025,000 reported last weekend —7.0% lower than the $992,500 recorded over the same weekend last year.

Data Powered by Dr Andrew Wilson; My Housing Market

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House values continued to fall last month, but the pace of decline has slowed, CoreLogic reports.

In signs that the RBA’s aggressive approach to monetary policy is making an impact, CoreLogic’s Home Value Index reveals national dwelling values fell -1.0 percent in November, marking the smallest monthly decline since June.

The drop represents a -7.0 percent decline – or about $53,400 –  since the peak value recorded in April 2022. Research director at CoreLogic, Tim Lawless, said the Sydney and Melbourne markets are leading the way, with the capital cities experiencing the most significant falls. But it’s not all bad news for homeowners.

“Three months ago, Sydney housing values were falling at the monthly rate of -2.3 percent,” he said. “That has now reduced by a full percentage point to a decline of -1.3 percent in November.  In July, Melbourne home values were down -1.5 percent over the month, with the monthly decline almost halving last month to -0.8%.”

The rate of decline has also slowed in the smaller capitals, he said.  

“Potentially we are seeing the initial uncertainty around buying in a higher interest rate environment wearing off, while persistently low advertised stock levels have likely contributed to this trend towards smaller value falls,” Mr Lawless said. “However, it’s fair to say housing risk remains skewed to the downside while interest rates are still rising and household balance sheets become more thinly stretched.” 

The RBA has raised the cash rate from 0.10 in April  to 2.85 in November. The board is due to meet again next week, with most experts still predicting a further increase in the cash rate of 25 basis points despite the fall in house values.

Mr Lawless said if interest rates continue to increase, there is potential for declines to ‘reaccelerate’.

“Next year will be a particular test of serviceability and housing market stability, as the record-low fixed rate terms secured in 2021 start to expire,” Mr Lawless said.

Statistics released by the Australian Bureau of Statistics this week also reveal a slowdown in the rate of inflation last month, as higher mortgage repayments and cost of living pressures bite into household budgets.

However, ABS data reveals ongoing labour shortages and high levels of construction continues to fuel higher prices for new housing, although the rate of price growth eased in September and October. 

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