Record May Auction Listings Bring Strong Results
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Record May Auction Listings Bring Strong Results

Pre-Budget home sellers took advantage of insatiable buyer’s appetite.

By Terry Christodoulou
Mon, May 10, 2021 10:54amGrey Clock 2 min

Auction results from Saturday, May 8, saw a number of sellers attempt to cash in on what is still a boomtime market.

A May record of 2563 auctions were reported in auction capitals on Saturday – an increase of 12.2% over the previous weekend and the second-highest offering of the year so far, only behind the Super Saturday auctions of Match 27.

Clearance rates in all capitals eased from the record-breaking March results, yet are still very strong in light of high auction numbers with an average clearance rate of 83.1% – just below the 83.3% of the previous weekend

The Auction markets will be further strengthened by the Federal Budget announcements which signal significant stimulus policies aimed directly at housing demand and first home buyers.

Sydney’s high autumn clearance rates have faded marginally compared to the results recorded in March. However, the market still favours the seller with a clearance rate of 83.5% posted in the harbour city, just below 84.6% and well above the 71.3% recorded this weekend last year.

A Sydney May record of 1014 auctions was reported on Saturday, with the city recording a median price of $1,650,000 for houses sold at auction at the weekend, which was 3.7% higher than the $1,595,000 reported over the previous Saturday and 34% higher than the $1,231,000 recorded over the same weekend last year.

Melbourne fared similarly with a month-high weekend clearance rate of 80.7%, up on the previous weekend’s 80.1% and well ahead of the COVID-impacted 48.2% recorded over the same weekend last year.

A total of 1248 homes were reported listed for auction on Saturday – well above the 1084 auctioned over the previous weekend.

Melbourne recorded a median price of $1,050,000 for houses sold at auction on the weekend, which was 4.9% higher than the $1,001,000 recorded over the previous weekend.

Data powered by Dr Andrew Wilson of MyHousingMarket.com.au

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Amid looming rate rises, there are reasons to be cheerful as mortgage holders head into 2023

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Mortgage holders should brace themselves for more pain as the Reserve Bank of Australia board prepares to meet tomorrow for the first time this year.

Most economists and the major banks are predicting a rise of 25 basis points will be announced, although the Commonwealth Bank suggests that the RBA may take the unusual step of a 40 basis point rise to bring the interest rate up to a more conventional 3.5 percent. This would allow the RBA to step back from further rate rises for the next few months as it assesses the impact of tightening monetary policy on the economy.

The decision by the RBA board to make consecutive rate rises since April last year is an attempt to wrestle inflation down to a more manageable 3 or 4 percent. The Australian Bureau of Statistics reports that the inflation rate rose to 7.8 percent over the December quarter, the highest it has been since 1990, reflected in higher prices for food, fuel and construction.

Higher interest rates have coincided with falling home values, which Ray White chief economist Nerida Conisbee says are down 6.1 percent in capital cities since peaking in March 2022. The pain has been greatest in Sydney, where prices have dropped 10.8 percent since February last year. Melbourne and Canberra recorded similar, albeit smaller falls, while capitals like Adelaide, which saw property prices fall 1.8 percent, are less affected.

Although prices may continue to decline, Ms Conisbee (below) said there are signs the pace is slowing and that inflation has peaked.

“December inflation came in at 7.8 per cent with construction, travel and electricity costs being the biggest drivers. It is likely that we are now at peak,” Ms Conisbee said. 

“Many of the drivers of high prices are starting to be resolved. Shipping costs are now down almost 90 per cent from their October 2021 peak (as measured by the Baltic Dry Index), while crude oil prices have almost halved from March 2022. China is back open and international migration has started up again. 

“Even construction costs look like they are close to plateau. Importantly, US inflation has pulled back from its peak of 9.1 per cent in June to 6.5 per cent in December, with many of the drivers of inflation in this country similar to Australia.”

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