Weekend Auction Markets Low But Largely Steady
While the home auction clearance rate is trending lower, the market is showing signs of stabilisation.
While the home auction clearance rate is trending lower, the market is showing signs of stabilisation.
Weekend auction markets continue to report similar results, with buyer and seller activity moderated compared to previous months.
The national auction market reported a clearance rate of 60.1% at the weekend — slightly down on the previous weekend’s 60.8% and significantly lower than the 77.3% recorded over the same weekend last year.
Saturday’s results were once again the lowest clearance rate since lockdown-impacted August 2020.
National auction numbers were higher at the weekend with 1487 listings compared to last weekend’s 1442.
While the Sydney market continues to trend lower, it is stabilising albeit at the lowest levels since lockdowns in April 2020.
The NSW capital recorded a clearance rate of 57.9% at the weekend — similar to the 58.0% recorded the previous weekend but well below the 75.1% of the same weekend last year.
The number of residences auctions was lower at the weekend with 575 reported compared to the previous weekend’s 597 and higher than the 566 of the same weekend last year.
Sydney recorded a median price of $1,505,500 for houses sold at auction at the weekend which was slightly lower than the $1,515,000 recorded last weekend and 1.8% lower than the same weekend last year’s $1,532,500.
Melbourne’s weekend auction market continues to produce steady results with the impact of higher interest rates having an effect on buyer confidence.
Melbourne reported a clearance rate of 607% on Saturday – lower than the previous weekend’s 60.4% and lower than the 79% recorded on the same weekend last year.
A total of 627 homes were reported listed in the Victorian capital at the weekend — higher than the 598 reported over the previous weekend but again well below the 1120 of the same weekend last year.
Melbourne recorded a median price of $1,000,000 for houses sold at auction at the weekend which was higher than the $923,000 reported last weekend and 6.6% higher than the $938,000 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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