New Auction Year Kicks Off Early
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New Auction Year Kicks Off Early

Eager sellers look to get a head start on the market.

By Terry Christodoulou
Mon, Jan 24, 2022 11:22amGrey Clock 2 min

As sellers look to get a head start on the rest of the market, the property auction market has kicked into gear earlier than usual.

Of the 448 homes listed nationally for auction over the past week, 66.8% sold according to data from CoreLogic.

The auction volume for the first major weekend of the year was significantly higher than the previous corresponding weekend at almost double the same time last year — with 244 properties auctioned.

CoreLogic predicts the number of homes taken to auction will continue to rise over the coming weeks, with over 1150 auctions expected to be held next week, compared to 884 over the same week last year.

In Sydney, a total of 79 homes hit the market — compared to 47 this time last year — of which 60 have been recorded and 58.3% of those auctions were successful.

Melbourne proved the busiest auction capital this week with 144 properties listed for auction.

With 100 results taken at the time of writing, 64% reported a successful result — on par with the average final clearance rate through December.

Over the same week last year, 127 homes were auctioned across the Victorian capital.

The push for sellers to get a jump on the market follows on from a record December quarter in 2021.

CoreLogic’s Quarterly Auction Market Review recorded 42,918 properties were taken to auction across the combined capital cities in the three months to December 2021.

The numbers equate to an 85.1% increase from the previous quarter and a 109.5% lift from the December 2020 figures.

In Australia’s two biggest auction markets, Melbourne had 19,788 auctions and a clearance rate of 69.7% for the December quarter compared to Sydney with 14,906 auctions and a clearance rate of 69.9%.

Across all capitals, the quarterly clearance rate of 71.3% was fractionally down on the previous quarter’s 71.7%

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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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