Sydney Weekend Clearance Rate Falls Under 60%
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Sydney Weekend Clearance Rate Falls Under 60%

The national figure is also at a two-year low.

By Kanebridge News
Mon, Jun 20, 2022 10:23amGrey Clock 2 min

 Following the Queen’s Birthday long weekend, auction number predictably surged at the weekend, with a total number of listings of 2191 compared to 992, yet, well below the same weekend last year’s 2888 auctions.

The result of a lift in volumes combined with weakening confidence in the market saw the national clearance rate report a 2-year-low of 62.7% at the weekend — well below the 67.3% reported last weekend and significantly lower than the 82.3% recorded over the same weekend last year.

Sydney’s market has fallen below 60% for the first time since the lockdown of April 2020 as a buyer’s market emerges.

The NSW capital recorded a clearance rate of 59.6%, lower than the 61.5% recorded last weekend and again significantly lower than the 80.8% recorded over the same weekend last year.

A total of 751 homes were listed in Sydney at the weekend — up on the 420 listed last weekend but well below last year’s corresponding 1036 auctions.

Sydney recorded a median price of $1,745,000 for houses sold at auction at the weekend which was again higher than the $1,650,000 recorded last weekend and 8.4% higher than the same weekend last year’s $1,610,000.

Melbourne’s auction market is proving more resilient, with a clearance rate of 62.9% holding steady when compared to the previous weekend’s 62.4% yet certainly lower than the 74.4% recorded over the same weekend last year.

A total of 134 homes were reported listed at the weekend – significantly higher than the holiday weekend’s 342 reported but well below the 1566 listed over the same weekend last year.

The Victorian capital also recorded a median price of f $1,010,000 for houses sold at auction at the weekend which was higher than the $900,000 reported last weekend and 3.2% higher than the $979,000 recorded over the same weekend last year.

Data powered by Dr Andrew Wilson, My Housing Market.

 



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Stronger demand in some areas is pushing unit rents up faster than houses

By Bronwyn Allen
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Renters are returning to the apartment market, leading to higher growth in weekly rents for units than houses over the past year, according to REA data. As workers return to their corporate offices, tenants are coming back to the inner city and choosing apartment living for its affordability.

This is a reversal of the pandemic trend which saw many renters leave their inner city units to rent affordable houses on the outskirts. Working from home meant they did not have to commute to the CBD, so they moved into large houses in outer areas where they could enjoy more space and privacy.

REA Group economic analyst Megan Lieu said the return to apartment living among tenants began in late 2021, when most lockdown restrictions were lifted, and accelerated in 2022 after Australia’s international border reopened.

Following the reopening of offices and in-person work, living within close proximity to CBDs has regained importance,” Ms Lieu said.Units not only tend to be located closer to public transport and in inner city areas, but are also cheaper to rent compared to houses in similar areas. For these reasons, it is unsurprising that units, particularly those in inner city areas, are growing in popularity among renters.

But the return to work in the CBD is not the only factor driving demand for apartment rentals. Rapidly rising weekly rents for all types of property, coupled with a cost-of-living crisis created by high inflation, has forced tenants to look for cheaper accommodation. This typically means compromising on space, with many families embracing apartment living again. At the same time, a huge wave of migration led by international students has turbocharged demand for unit rentals in inner city areas, in particular, because this is where many universities are located.

But it’s not simply a demand-side equation. Lockdowns put a pause on building activity, which reduced the supply of new rental homes to the market. People had to wait longer for their new houses to be built, which meant many of them were forced to remain in rental homes longer than expected. On top of that, a chronic shortage of social housing continued to push more people into the private rental market. After the world reopened, disrupted supply chains meant the cost of building increased, the supply of materials was strained, and a shortage of labour delayed projects.

All of this has driven up rents for all types of property, and the strength of demand has allowed landlords to raise rents more than usual to help them recover the increased costs of servicing their mortgages following 13 interest rate rises since May 2022. Many applicants for rentals are also offering more rent than advertised just to secure a home, which is pushing rental values even higher.

Tenants’ reversion to preferring apartments over houses is a nationwide trend that has led to stronger rental growth for units than houses, especially in the capital cities, says Ms Lieu. “Year-on-year, national weekly house rents have increased by 10.5 percent, an increase of $55 per week,” she said.However, unit rents have increased by 17 percent, which equates to an $80 weekly increase.

The variance is greatest in the capital cities where unit rents have risen twice as fast as house rents. Sydney is the most expensive city to rent in today, according to REA data. The house rent median is $720 per week, up 10.8 percent over the past year. The apartment rental median is $650 per week, up 18.2 percent. In Brisbane, the median house rent is $600 per week, up 9.1 percent over the past year, while the median rent for units is $535 per week, up 18.9 percent. In Melbourne, the median house rent is $540 per week, up 13.7 percent, while the apartment median is $500 per week, up 16.3 percent.

In regional markets, Queensland is the most expensive place to rent either a house or an apartment. The house median rent in regional Queensland is $600 per week, up 9.1 percent year-onyear, while the apartment median rent is $525, up 16.7 percent.

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