Record Listings Push Clearance Rate Down
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Record Listings Push Clearance Rate Down

An unprecedented number of auctions tested buyer depth.

By Kanebridge News
Mon, Dec 13, 2021 10:29amGrey Clock 2 min

The penultimate weekend auction market for 2021 tested the depth of buyers with a record number of listings.

National auction numbers were significantly higher — rising from the previous Saturday’s 3096 to a new weekend record of 3632 — well ahead of the 2078 auctioned over the same weekend last year.

The high volume of auctions sent the national clearance rate down to 75.4% at the weekend — lower than the 76.8% reported the previous weekend and lower than the 78.4% recorded over the same weekend last year.

Sydney’s market recorded a clearance rate of 67.4% — well down on the previous weekend’s 76.6% and significantly lower than the 80.1% recorded over the same weekend last year.

A record 1371 homes were listed for auction on Saturday— well ahead of the previous weekend’s 1189 and higher than the 870 auctioned over the same weekend last year.

Sydney’s median price of $1,707,500 for houses sold at auction at the weekend was higher than the $1,622,500 reported over the previous Saturday and 20.7% higher than the $1,415,000 recorded over the same weekend last year.

In Melbourne, the weekend auction market produced an all-time high number of auctions, breaking recorded for the volume and value of weekend auction sales.

The Victorian capital recorded 1765 homes auctioned at the weekend — well ahead of the 1491 reported over the previous weekend and significantly higher than the 979 auctioned over the same weekend last year.

Despite the surge in listings, Melbourne reported a clearance rate of 70.1% on Saturday – higher than the previous weekend’s 68.5% yet lower than the 73.4% recorded over the same weekend last year.

Melbourne recorded a median price of $1,112,500 for houses sold at auction at the weekend — lower than the $1126,000 recorded over the previous weekend but 7.9% higher than the $1,031,000 recorded over the same weekend last year.

Data powered by Dr Andrew Wilson, myhousingmarket.com.au

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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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