Record February Ends With Market Cool Off
Late summer listings ease clearance rates.
Late summer listings ease clearance rates.
The high volumes of homes that went to auction through February has finally eased clearance rates.
Despite a largely positive weekend across the nation’s capitals, the clearance rate has finally succumbed to the volume of listings that has inundated the market this past weekend and throughout February.
The national auction market reported a significant increase over the weekend, with a total of 2627 listings reported compared to the previous weekend’s 2341 and ahead of the 2163 reported for the same weekend last year.
The high volumes led to a national clearance rate of 77.9%, the lowest for the month. This is compared to last weekend’s 81.5% and well below the 83.3% recorded over the same weekend last year.
Capital city markets face a challenge with the first ‘Super Saturday’ of the year next weekend likely to put downward pressure on clearance rates.
Sydney saw another strong clearance rate despite yet another record February day for auction listings with 965 properties listed — up on the previous weekend’s 878 and higher than the 734 reported over the same weekend last year.
The NSW capital recorded a clearance rate of 78.8% at the weekend — higher than the 78.1% reported over the previous weekend but well below the 90.0% recorded over the same weekend last year.
Sydney recorded a median price of $1,755,000 for houses sold at auction at the weekend which was higher than the $1,750,000 reported over the previous weekend and 6.7% higher than the $1,645,000 recorded over the same weekend last year.
In Melbourne, the weekend auction market reported a significant day of auctions with 1288 homes listed — higher than the previous weekend’s 1129 and above the 1211 reported for the same weekend last year.
The Victorian capital posted a clearance rate of 71.4% on Saturday, a 4-weekend low and well below the 82.0% recorded over the same weekend last year.
Melbourne recorded a median price of $1,187,000 for houses sold at auction at the weekend which was higher than last weekend’s $1,165,000 and 18.4% higher than the $1,005,000 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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