National Auction Market Officially Kicks Off
Major capitals slow off the mark in two-speed market.
Major capitals slow off the mark in two-speed market.
The 2022 home auction year has officially commenced.
While the weekend saw mostly positive results for early-season sellers the two-speed national market is intensifying.
Adelaide, Canberra and Brisbane’s markets have carried its momentum from the latter stages of 2021 into the new year with strong clearance rates this weekend reporting 88.4%, 74.0% and 86.1% respectively.
Elsewhere, the major markets of Sydney and Melbourne are stuttering, reporting lower clearance rates when compared to the same weekend last year at 65.8% and 68.5% respectively.
The national auction market reported a clearance rate of 76.6% at the weekend which was similar to the 76.0% reported over the final auction weekend of 2021 but lower than 77.7% recorded over the same weekend last year.
The number of listings that went to auction over the weekend was 836, higher than the 690 auctioned over the same opening weekend last year.
Sydney’s aforementioned clearance rate of 65.8% is well down on the 81.1% recorded over the same opening weekend last year.
Despite surrounding covid concerns and distractions, a season-opening record 318 homes were listed for auction at the weekend — up on the 138 auctioned over the same opening weekend last year.
The NSW capital recorded a median price of $1,380,000 for houses sold at auction at the weekend which was lower than the $1,580,000 reported over the final auction Saturday of 2021 but 10.8% higher than the $1,246,000 recorded over the same weekend last year.
Melbourne’s clearance rate of 68.5% was also down on the 84.0% recorded over the same weekend last year.
A total of 250 homes were reported listed for auction at the weekend – lower than the 308 reported over the same weekend last year.
The Victorian capital recorded a median price of $873,000 for houses sold at auction at the weekend which was lower than the last weekend in December’s $1,000,000 and 4.3% lower than the $912,500 recorded over the same weekend last year.
Data powered by Dr Andrew Wilson, My Housing Market.
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Ray White’s chief economist outlines her predictions for housing market trends in 2024
Ray White’s chief economist, Nerida Conisbee says property price growth will continue next year and mortgage holders will need to “survive until 2025” amid expectations of higher interest rates for longer.
Ms Conisbee said strong population growth and a housing supply shortage combatted the impact of rising interest rates in 2023, leading to unusually strong price growth during a rate hiking cycle. The latest CoreLogic data shows home values have increased by more than 10 percent in the year to date in Sydney, Brisbane and Perth. Among the regional markets, price growth has been strongest in regional South Australia with 8.6 percent growth and regional Queensland at 6.9 percent growth.
“As interest rates head close to peak, it is expected that price growth will continue. At this point, housing supply remains extremely low and many people that would be new home buyers are being pushed into the established market,” Ms Conisbee said. “Big jumps in rents are pushing more first home buyers into the market and population growth is continuing to be strong.”
Ms Conisbee said interest rates will be higher for longer due to sticky inflation. “… we are unlikely to see a rate cut until late 2024 or early 2025. This means mortgage holders need to survive until 2025, paying far more on their home loans than they did two years ago.”
Buyers in coastal areas currently have a window of opportunity to take advantage of softer prices, Ms Conisbee said. “Look out for beach house bargains over summer but you need to move quick. In many beachside holiday destinations, we saw a sharp rise in properties for sale and a corresponding fall in prices. This was driven by many pandemic driven holiday home purchases coming back on to the market.”
Here are three of Ms Conisbee’s predictions for the key housing market trends of 2024.
Ms Conisbee said the types of apartments being built have changed dramatically amid more people choosing to live in apartments longer-term and Australia’s ageing population downsizing. “Demand is increasing for much larger, higher quality, more expensive developments. This has resulted in the most expensive apartments in Australia seeing price increases more than double those of an average priced apartment. This year, fewer apartments being built, growing population and a desire to live in some of Australia’s most sought-after inner urban areas will lead to a boom in luxury apartment demand.”
The rising costs of energy and the health impacts of heat are two new factors driving interest in green homes, Ms Conisbee said. “Having a greener home utilising solar and batteries makes it cheaper to run air conditioning, heaters and pool pumps. We are heading into a particularly hot summer and having homes that are difficult to cool down makes them far more dangerous for the elderly and very young.”
For some time now, long-term social changes such as delayed marriage and an ageing population have led to more people living alone. However, Ms Conisbee points out that the pandemic also showed that many people prefer to live alone for lifestyle reasons. “Shorter term, the pandemic has shown that given the chance, many people prefer to live alone with a record increase in single-person households during the time. This trend may influence housing preferences, with a potential rise in demand for smaller dwellings and properties catering to individuals rather than traditional family units.”
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